English to German Bus/Financial Investment / Securities Credits

• We are currently underweight Telecoms. This reflects our overall bearish stance on credit as a whole: we express our bearish view through liquid sectors and Telecoms is one of them.

• Within telecoms we became particularly more cautious on the long end, which underperformed since the moment we put ***steepener trades***.

• Fundamentally we view the telecoms sector as stable. Deleveraging is as good as over. Cash flows are very robust, but increased pay-outs to shareholders are now on the agenda. Moreover, M&A is picking up, but seems to take the shape of relatively small and manageable bolt-on acquisitions.

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