Broker snap: Corporate bond demand to boost Schroders

29th Jul 2009 12:28

Fund manager Schroders is seeing strong demand for its European corporate bond product, prompting Morgan Stanley to upgrade the stock.Morgan Stanley (MS) has changed its stance on Schroders from "underweight" to "overweight" and ramped up its price target from 710p to 1045p, arguing that the market's expectations of earnings growth do not take into account a strong improvement in high-margin retail funds.MS has pored over Schroders' Luxembourg fund factsheets and has uncovered a £3bn second-quarter inflow of funds, as investors rush to gain exposure to the European corporate bond market. Schroders publishes results on 6 August. Despite tough conditions in the US and Asian markets, MS expects the fund manager's interim figures to surprise to the upside.