Just in:
IIT Delhi and TeamLease EdTech Kick‑start AI for Healthcare Executive Programme // BoE charts new wholesale terrain for stablecoins and tokenised assets // Galaxy AI Elevates On‑Device Intelligence with Privacy at Core // Qingzhen’s Zhanjie Town Leverages Ecological Resources to Drive Industrial Upgrading and Integrate Culture and Tourism for Rural Revitalization // Abu Dhabi’s Masdar and Iberdrola Back £5 Billion UK Offshore Wind Venture // Nvidia is the dream stock of our lifetime! // Anhui Unveils Teaser for 2025 World Manufacturing Convention, Extending a Global Invitation to Innovate Together // “Eternal City” Pompeii Exhibition Opens in Hunan, Marking New Sino-Italian Cultural Exchange // Coffee Chains Join Bitcoin Mania with Bold Treasury Moves // Can India Emerge As The Trusted Leader Of Global South Like Earlier Years? // Stonepeak Secures Strategic Co-Control of IFCO Stake // Results of the ixCrypto Index Series Quarterly Review (2025 Q2) & IX Digital Asset Industry Index Series Half Yearly Review (2025 1H) // ICONSIAM Showcases Thai Creativity to the World with “Lost in DOMLAND” — Reinforcing Its Role as a Must-Visit Global Art Destination // BRICS Pledge Cooperation, Not Confrontation With U.S. // CGTN: Beauty in diversity: How wisdom at Nishan Forum inspires global modernization // Musk Alleges Grok Was Misled and Predicts Tech Breakthroughs // Behomes Launches Behomes Hub – Cashback & Networking App for Real Estate Professionals // Sharjah Elevates Real‑Estate Platform with New Digital Portal // Record Global Interest Drives CDB’s Dual‑Currency Bond Triumph // Air Arabia Reinitiates Sharjah–Damascus Flights //

BoE’s corporate bond buying surpasses expectations

2c9bd81a d75d 11e6 944b e7eb37a6aa8e

The Bank of England’s corporate bond buying plan has moved much faster than investors expected with the central bank surpassing half of its total target just five months after the programme was launched.

Started in September as part of the central bank’s plan to cushion the economy from any fallout from the Brexit vote, the programme has seen the BoE buy £5.2bn of corporate bonds, according to the latest data released on Thursday.

ADVERTISEMENT

Policymakers at the bank set out to buy up to £10bn of bonds over an 18-month period, alongside cutting interest rates to record low levels.

“It’s had a positive effect in terms of issuance,” said Lloyd Harris, an investor at Old Mutual. “If they hadn’t responded, then I can see the economy would be in a slightly worse place.”

The programme triggered a rush of issuance in the UK’s corporate bond market. In September, sterling corporate bond sales hit their highest monthly levels in more than seven years.

It has also supported prices for outstanding bonds. An index measuring the overall total return on sterling corporate bonds is up 3.7 per cent since June, though it is currently lower than the levels it touched last August when rates touched record lows.

The purchases, according to the BoE, are intended to lower yields, trigger portfolio rebalancing into other assets, and increase issuance. It also said it would buy bonds of companies make a “material contribution to the UK”.

Under the plan, investors offer bonds they want to sell to the central bank. A total of bonds with a face value of £110bn were eligible for purchases.

“The rate of purchases has surprised to the upside, in part because UK fund managers found bonds to sell them,” said Zoso Davies, a credit strategist at Barclays.

Traders and strategists closely watch data on bond purchases from the central bank for clues as to when the programme will end.

The interest echoes that on European corporate bonds, which the European Central Bank has been buying since June and whose programme has similarly bolstered prices.

The sterling bond market has diminished in stature over recent years with many companies preferring to borrow in dollars or euros. Some market participants have seen the corporate bond purchases as a revitalising force.

“The CAPS [corporate bond purchase scheme] seems to have increased trading flows — it took a market that was blocked and unblocked it,” said Mr Davies. “Sterling issuance had dwindled to almost nothing — CPBS reopened the pipeline.”

Source link


Notice an issue?

Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.


ADVERTISEMENT