Portugal stocks and related exchange traded funds are strengthening as investors grow more optimistic about the country’s recovery prospects, with bond yields dipping to its lowest since the sovereign debt crisis.
The relatively new Global X FTSE Portugal 20 ETF (NYSEArca: PGAL) is up 5.8% so far this year and rose 8.8% over the past month.
Portugal’s economy has been in recovery mode since the second quarter of 2013, but the Eurozone sovereign debt crisis previously caused the economy the contract 4.6%, compared to where it was at the end of 2010, Bloomberg reports.
The country, though, is making strides in paying back debt, and recently sold 1.01 billion euros, or $1.37 billion, of 12-month bills at an average yield of 0.869%, the lowest yield since November 2009.
“I didn’t expect such low yields,” Filipe Silva, director of asset management at Banco Carregosa SA in Oporto, said in the article. “The perception of risk that investors have on Portuguese debt is dropping quite a lot.”
The bond sale is an encouraging sign for Portugal and PGAL because it shows the country can raise money on its own less than three years after the bailout. [Portugal ETF Benefits From Dash to Trash]