REFILE-Investors such as cenbanks interested in UK gilts after yield surge, Natwest Markets CEO says

LONDON, May 28 (Reuters) - Some official institutions such as central banks are meaningfully interested ​in ‌the UK government bond market for the first time given sharply ⁠higher yields, Natwest Markets' chief executive officer said ⁠on Thursday.

"We had a conference ​last week, and heard from a lot of investors that they're really looking at actually engaging with the gilt market, some of ​them for ‌the first time. They see rates as being very good value here," Jonathan Peberdy, chief executive officer at Natwest Markets, told an International Capital Markets Association conference in London.

Asked which investors ​were looking at the market for the first time, this includes ‌a number of official institutions or central banks whose sterling portfolio is relatively small, Peberdy told Reuters ‌on the sidelines.

In addition to central banks, official institutions also include sovereign wealth funds and government departments.

"They're considering whether they'll increase ​their sterling allocation within their portfolio" he added.

UK government bond yields have risen ‌the most among advanced economies since the Iran war broke out at the end of February, with 10-year yields up 60 basis points. ⁠Uncertainty ⁠over the future of Prime Minister Keir Starmer ‌and the potential for a leadership contest has also weighed on the market ​recently.

Peberdy declined ​to specify which regions the institutions were based ‌in but said they were not Asian.

Sterling accounts for roughly 4.4% of global currency reserves, according to International Monetary Fund data. (Reporting by Yoruk Bahceli; editing by Dhara Ranasinghe)

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