Bear Stearns index loses 6.77% in Sept., 4.42% in quarter

By Peter Heap

New York, Oct. 3 - The Bear Stearns high yield index had a total return of negative 6.77% in September, dragging the performance for the quarter down to negative 4.42% and the year-to-date through the end of September to negative 0.68%.

At the end of the quarter on Sept. 30, the index covered 1,429 issues with a total market value of $291.3 billion. Its yield to worst was 14.36% and the spread over Treasuries 1029 basis points, a widening of 210 basis points on the month. The average price of bonds in the index was 75.77.

For the month, consumer non-cyclicals were the best performing broad industry, relatively speaking. But they still lost 1.49% on a total return basis. Bottom was transportation, which gave up 18.27%, largely the result of a 29.93% loss in the airlines sub-sector in response to the terrorist atrocity on Sept. 11.

However airlines were not the weakest of the sub-sectors tracked by the Bear Stearns index. Broadband access and internet services did even worse, losing 47.54% - or nearly half its value - in the single month.

The strongest sub-sector was actually another component of the telecommunications group, paging and messaging. These bonds returned 7.91%, one of only two sub-sectors to show a positive performance, the other being banking which added 0.58%. However paging and messaging is still the bottom sector year to date.

The picture for the third quarter was broadly similar. Consumer non-cyclicals were the strongest broad sector, returning 2.97%. Weakest was transportation, which shed 16.22%, largely owing to a 28.14% decline in airlines.

Among narrow sectors, the third quarter's worst performer was September's winner, paging and messaging, which lost 51.62%, edging out broadband and internet access at negative 51.21% for the wooden spoon.

Strongest of the sub-sectors was diversified programmers, part of the media group, which was up 6.42%.

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