Corporate bond yields still have further to rise

Yield hungry equity fund managers are finding more to go for among stocks than corporate bonds. British American Tobacco (BAT) paper yields 8.6% while Orange and Atlantic Telecom bonds offer 8%, an attractive proposition compared with the 2.3% yield on the All Share. By contrast Scottish Power and the Halifax paper yield 7.4% and 13% respectively and presumably have better prospects for capital appreciation if and when the enthusiasm for new economy stocks dies down. Carl Stick, manager of Rathbone Income unit trust, holds no corporate bonds and has only one preference share preferring t...