BELFAST

THE FIVE-YEAR Irish Unity Bond has seen its yield rise sharply following UK Prime Minister Andy Burnham’s declaration that a referendum on the reunification of the island was off the table.

“The five-year bond is the key instrument tracking the likelihood of a referendum,” says bond market analyst Ralph Hedge. “There is no two-year instrument, and the 10 and 30 year bonds have had very little liquidity in them up to now. But the five-year bond is a little firecracker. It’s yields are up and down like a whore’s drawers. Am I allowed say that? Anyway, Burnham has burned a lot of people, particularly Sinn Fein voters, who had been buying the five-year bonds in shed-loads, on the basis of promises of a border poll within that time-frame. Recently, Micael Martin, the Irish Prime Minister, or Taoiseach as they call him, has been heavily shorting the five-year Irish Unity Bond, and he may reap a small fortune for the Dublin exchequer if the rate keeps rising the way it has been on the grey market. Martin has been warning against a unity poll since forever, saying it was not the right time, that it would upset people, all that sort of stuff, and many have called him Chicken Little for doing so. But his short position may well pay off now, that is if it does not turn out that he had a quiet word in his British opposite number’s ear before Burnham’s announcement. Let’s see what next week brings. That said, we may well see a lot of new money pour into the 10 and 30 Year Irish Unity Bonds, following remarks from former British Prime Minister Gordon Brown that he thought Irish unity was inevitable in the long term. My money’s on the 30-year bond becoming far more liquid. the 10-Year instrument is still far too risky and iliquid. Timing is everything, in finance and politics.”