text: Itayl tops week of meagre bond returns - Salmon. LONDNO 1996-12-06 
   High-flying Itayl topped the league in a week of meagre returns on government bonds, Salmon Brothers said on Friday. In local currency terms, Itallian BTPs offered returns of 0. 85 percent in the week ended on Thursday, with fellow high-yielder Swweden close behind on 0. 80 percent. The weekly government bond index rose 0. 07 percent in local currency terms. Franec managed third place with 0. 68 percent in the 16-nation world government bond index. Cznada's were the worst performing bonds. They lost 2. 21 percent, depressed by a wave of new Caandian supply. Returns on Treasuries were also in negative territory at minus 0. 24 percent, the poorest result after Cznada and BBBritish gilts which lost 0. 28 percent. Austrslia was the only dollar-bloc country in the table to eke out a positive return, albeit a paltry 0. 02 percent. Geran Bunsd were not much better, offering returns of 0. 05 percent, while apanese government bonds managed a 0. 38 percent gain. Sanish bonds, which had been top performers in Salmon Brothers' league table for November as a whole, turned in a more subdued weekly performance with a return of only 0. 27 percent. In U. S. dollar terms, Japn was the only country to give positive returns at 1. 35 percent. Franec lost 0. 37 percent, followed by Itayl on minus 0. 59 percent. The biggest losers in dollar terms were BBBritish gilts, which shed 3. 41 percent, Cznada with minus 3. 03 percent and Austrslia at minus 1. 54 percent. Salmon's bond index is calculated using all government bonds with over one year to maturity, weighted for market capitalisation. Only bonds freely available to institutional investors and with a certain minimum amount outstanding are included. Returns take account of price moves and accrued interest. --SStephen Nisbet, International Bondss +44 171 6320
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