Less Ads, More Data, More Tools Register for FREE

Pin to quick picksHSBC Holdings Share News (HSBA)

Share Price Information for HSBC Holdings (HSBA)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 676.80
Bid: 678.10
Ask: 678.30
Change: 3.60 (0.53%)
Spread: 0.20 (0.029%)
Open: 678.60
High: 679.40
Low: 670.30
Prev. Close: 673.20
HSBA Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Sterling's BoE-fuelled rally hits turbulence

Fri, 12th Aug 2016 15:09

* Borrowers print £5.5bn on BoE news

* Issuance boom sees spreads sag

* Investors turn to long end for yield

By Laura Benitez and Helene Durand

LONDON, Aug 12 (IFR) - Sterling bond issuance has boomed since the Bank of England announcedstimulus measures last Thursday, but the weight of new supply has put pressure on spreads andthe rally could already be running out of steam.

Corporates and financials have sold just over £5.5bn of bonds since last Thursday'sannouncement, accounting for over 20% of total sterling issuance so far this year. But newissues are up to 8bp wider.

"It's no surprise that the rally has ended - even if it's only a temporary halt - spreadsrallied too hard too fast," one investor said.

Since the BoE announced it would start buying corporate bonds in September, the sterlingnon-financials iBoxx index has tightened by over 29bp and was quoted at 168bp at midday onFriday.

Vodafone's £1bn 3% 40-year deal, which printed the previous Friday, was bid 8bp wider a weeklater, at 176bp over Gilts, according to Tradeweb.

Similarly, BMW's 0.875% £600m August 2022 paper, which priced on Monday, had widened 7bp byThursday, while BP's 1.177% seven-year trade from Monday widened 4bp.

Syndicate bankers attributed some of the underperformance to the BoE's failure to buy allthe Gilts it wanted at a reverse auction on Tuesday as investors refused to part with theirlonger-dated bonds.

"While there is still a demand for sterling, the question is the price; we have alreadystarted to see some push back on some of the sterling financial deals priced this week," onesyndicate banker said.

"There is still some deep demand from specific funds. The problem is that the investor baseon the sterling side is very thin, so you have to be careful how much you push the pricing."

STERLING BONANZA

The sterling primary bond market typically dries up over the summer as many corporates arein close periods ahead of reporting earnings, while some are simply put off from raising newdebt for fear that investors are away from their desks.

But the BoE's corporate bond purchase announcement gave the market a sudden summer urgency,with expectations that £150bn of bonds are likely to be eligible under its corporate bondpurchase scheme out of a total universe of some £400bn outstanding.

HSBC, BNP Paribas, BMW and BP took full advantage of positive momentum earlier in the week,following on from issues last week by Barclays and Vodafone.

"Issuance for most of the year had been at historical lows but it doesn't take a lot tochange that and that's what we're seeing right now," said Marco Baldini, head of European bondsyndicate at Barclays.

"QE is a real game-changer and investors simply can't run the risk of running underweight insterling credit."

Despite the week's underperformance in sterling credit spreads, a research note by BNPParibas said there is the potential for the market to grind tighter, especially as the marketedges closer to the start of purchases in mid-September.

YIELD HUNT

The BoE's intervention has also seen investors move away from intermediate sterling creditand turn to the long end in a desperate attempt to source yield.

The long end of the sterling curve has struggled over the past two years due to changes inpension legislation structurally lowering the demand for duration, wrote Matthew Bailey, aEuropean credit analyst at JP Morgan in a research note.

"In our view, curve steepening in sterling has now run its course ... the global'search-for-yield' in investment-grade fixed income is back, with investors buying anything witha positive carry ... we recommend increasing exposure to long-dated sterling credit."

Some long-end deals have already performed phenomenally well. Electricite de France's £1.3bn2114s are now up nearly 30 price points at a 172 cash price since the BoE announced itsprogramme.

David Riley, head of credit strategy at BlueBay Asset Management said further tighteningcould be on the horizon in the coming weeks, which would in turn reduce the sterling premium -in spread terms - over euro-denominated investment-grade corporate credit to its pre-Brexitreferendum level.

"With euro and now sterling corporate bond yields and spreads compressing on the back ofcentral bank buying, we believe the global search for yield that is boosting the emerging marketdebt and US credit markets will if anything intensify," Riley said.

(Reporting By Laura Benitez, editing by Matthew Davies and Robert Smith)

More News
3 Aug 2023 20:57

Royal Bank of Canada, criticized on climate, seeks executive to tackle issue

Aug 3 (Reuters) -

Read more
3 Aug 2023 19:13

UK's Hunt asks financial watchdog to urgently review 'debanking' concerns

LONDON, Aug 3 (Reuters) - British finance minister Jeremy Hunt said on Thursday he had asked the country's financial services watchdog to urgently investigate terminations of bank accounts and suggested that lenders who have broken the law should be fined.

Read more
3 Aug 2023 18:35

Britain's banks told to give data on terminating customer accounts

LONDON, Aug 3 (Reuters) - Britain's Financial Conduct Authority said on Thursday it will ask banks and building societies for data on customer account terminations to check if they were justified or break the law.

Read more
3 Aug 2023 15:45

UK dividends calendar - next 7 days

Friday 4 August 
Burberry Group PLCdividend payment date
Bytes Technology Group PLCdividend payment date
Bytes Technology Group PLCspecial dividend payment date
CC Japan Income & Growth Trust PLCdividend payment date
CT UK High Income Trust PLCdividend payment date
Ferguson PLCdividend payment date
Global Smaller Cos Trust PLCdividend payment date
Intermediate Capital Group PLCdividend payment date
JD Sports Fashion PLCdividend payment date
JPMorgan European Discovery Trust PLCdividend payment date
JPMorgan Multi-Asset Growth & Income PLCdividend payment date
Liontrust Asset Management PLCdividend payment date
Mitie Group PLCdividend payment date
NewRiver REIT PLCdividend payment date
Norcros PLCdividend payment date
North American Income Trust PLCdividend payment date
Palace Capital PLCdividend payment date
Premier Miton Group PLCdividend payment date
Regional REIT Ltddividend payment date
Schroder UK Mid Cap Fund PLCdividend payment date
Supermarket Income REIT PLCdividend payment date
Twentyfour Income Fund Ltddividend payment date
Value & Indexed Property Income Trust PLCdividend payment date
Vodafone Group PLCdividend payment date
Vp PLCdividend payment date
Workspace Group PLCdividend payment date
Monday 7 August 
no events scheduled 
Tuesday 8 August 
no events scheduled 
Wednesday 9 August 
National Grid PLCdividend payment date
Record PLCdividend payment date
Thursday 10 August 
abrdn New Dawn Investment Trust PLCex-dividend payment date
Alternative Income REIT PLCex-dividend payment date
Ashtead Group PLCex-dividend payment date
AstraZeneca PLCex-dividend payment date
Avon Protection PLCex-dividend payment date
Barclays PLCex-dividend payment date
BP PLCex-dividend payment date
Domino's Pizza Group PLCex-dividend payment date
Fresnillo PLCex-dividend payment date
Greencoat Renewables PLCex-dividend payment date
Greencoat UK Wind PLCex-dividend payment date
Halfords Group PLCex-dividend payment date
Hikma Pharmaceuticals PLCex-dividend payment date
HSBC Holdings PLCex-dividend payment date
IMI PLCex-dividend payment date
Impax Environmental Markets PLCex-dividend payment date
Informa PLCex-dividend payment date
IP Group PLCex-dividend payment date
Irish Residential Properties REIT PLCex-dividend payment date
Lindsell Train Investment Trust PLCex-dividend payment date
LMS Capital PLCex-dividend payment date
Majedie Investments PLCex-dividend payment date
Man Group PLCex-dividend payment date
NatWest Group PLCex-dividend payment date
PayPoint PLCex-dividend payment date
Pearson PLCex-dividend payment date
PRS REIT PLCex-dividend payment date
Quartix Technologies PLCex-dividend payment date
Reach PLCex-dividend payment date
Residential Secure Income PLCex-dividend payment date
Rio Tinto PLCex-dividend payment date
Safestore Holdings PLCdividend payment date
Scottish American Investment Co PLCex-dividend payment date
Segro PLCex-dividend payment date
Shell PLCex-dividend payment date
Speedy Hire PLCex-dividend payment date
Spirent Communications PLCex-dividend payment date
Standard Chartered PLCex-dividend payment date
Target Healthcare REIT PLCex-dividend payment date
Taylor Maritime Investments Ltdex-dividend payment date
Treatt PLCdividend payment date
Tritax Big Box REIT PLCex-dividend payment date
Vanquis Banking Group PLCex-dividend payment date
Vh Global Sustainable Energy Opportunities PLCex-dividend payment date
  
Copyright 2023 Alliance News Ltd. All Rights Reserved.

Read more
2 Aug 2023 17:04

UK's FTSE 100 at two-week low as surprise US credit rating cut sours mood

Fitch downgrades U.S. credit rating to AA+

*

Read more
2 Aug 2023 09:07

LONDON BROKER RATINGS: Barclays, Bernstein, Stifel cut Diageo PT

(Alliance News) - The following London-listed shares received analyst recommendations Wednesday morning:

Read more
2 Aug 2023 07:50

LONDON BRIEFING: Taylor Wimpey profit falls; BAE Systems revenue up

(Alliance News) - Stocks in London are called to open lower on Wednesday, after Fitch's US rating downgrade caused Asian markets to fall sharply.

Read more
1 Aug 2023 21:18

Gloomy data makes investors more cautious on world economy

Wall Street stocks mixed

*

Read more
1 Aug 2023 18:42

Gloomy data makes investors more cautious on global economy

Wall Street stocks mixed

*

Read more
1 Aug 2023 17:19

UK's FTSE 100 falls as weak China data hurts miners

Miners lead losses on weak China data

*

Read more
1 Aug 2023 17:17

European shares start August on sour note as global factory activity falters

STOXX 600 ends down 0.9%

*

Read more
1 Aug 2023 16:56

LONDON MARKET CLOSE: Lacklustre session on manufacturing PMI weakness

(Alliance News) - Blue-chip European equities ended lower on Tuesday, with weaker manufacturing data weighing on stock markets, while the dollar was on the up, benefitting from the cautious mood.

Read more
1 Aug 2023 15:52

Gloomy data makes investors more cautious on global economy

Wall Street stocks mixed

*

Read more
1 Aug 2023 14:50

Gloomy data tempers optimism on global economy

Wall Street stocks mixed

*

Read more
1 Aug 2023 11:56

Stocks, oil slide as gloomy data tempers optimism on economy

Euro STOXX down 0.6% after July gain of 2%

*

Read more

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.