LONDON - Following a year dominated by the squeeze in spreads across all asset classes, market pundits are beginning to question whether market dynamics will maintain the tightening bias in 2005.

At a conference held here last week on its securitization outlook for 2005, analysts at Dresdner Kleinwort Wasserstein said that market fundamentals could still bring pricing levels in further from 2004 lows, where tightening was significant across the board - coming in between 40% to 60% from levels registered at the beginning of 2004. Spread differentials between asset classes largely disappeared in 2004, said analysts.

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