BuyingBear Posted May 23, 2006 Share Posted May 23, 2006 Latest government bond sale flops http://uk.biz.yahoo.com/23052006/214/latest-government-bond-sale-flops.html' rel="external nofollow">LONDON (ShareCast) - Government officials today played down the poor response to the latest sale of UK (LSE: ATUK.L - news) index-linked bonds, saying that one auction is not necessarily indicative of demand overall. Bids covered the £700m of linkers on offer just 1.16 times, the weakest bid-to-cover since the failed auction of 2% 2035 index-linked gilt stock in September 2002. The last auction, in January, was covered 1.75 times. "We would not regard an auction as necessarily being indicative of wider demand patterns," Robert Stheeman, chief executive of the UK debt management office told reporters at a bond conference. "We have seen low cover at times of heightened volatility." Gilts had been strong yesterday as money switched out of equities with markets falling, but that trend reversed today as Footsie and other markets rebounded. Hrm, anyone want to tie up a £700m for 30 years for 1% above the rigged CPI? Hrm, pretty please. Quote Link to comment Share on other sites More sharing options...
CrashConnoisseur Posted May 23, 2006 Share Posted May 23, 2006 Hrm, anyone want to tie up a £700m for 30 years for 1% above the rigged CPI? Index linked gilts are based on the RPI (Rigged Price Index?) Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted May 23, 2006 Author Share Posted May 23, 2006 Hrm, anyone want to tie up a £700m for 30 years for 1% above the rigged CPI? Index linked gilts are based on the RPI (Rigged Price Index?) Sorry, RPI-X + 1%? Any takers? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted May 23, 2006 Share Posted May 23, 2006 Why buy UK bonds with the pound overvalued against world currencies when you can buy US bonds at a discount and at higher rates of return? Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted May 23, 2006 Author Share Posted May 23, 2006 (edited) Why buy UK bonds with the pound overvalued against world currencies when you can buy US bonds at a discount and at higher rates of return? That's exactly why the UK is amongst the foremost buyers of US Treasuries. But come on, who wants to buy our junk? The game isn't working anymore, maybe we can regulate the pension funds into holding 150% of their assets in gilts. Edited May 23, 2006 by BuyingBear Quote Link to comment Share on other sites More sharing options...
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