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GILTS: Citi Dig Into '24 Gilt Demand, Offshore Took Greatest Share Again

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Citi note that “data out at the end of last week completes the picture of who bought all the gilts in ‘24. 45% of ’24 net gilt supply was absorbed overseas, 34% was taken by private domestic investors and 22% was taken by domestic banks.”

  • They note that “this was the fifth time in the last six years that overseas investors have taken the greatest share (‘23 the exception), largely thanks to a strong pick-up in demand in the last quarter, a period in which cable depreciated by over 6% and gilts underperformed sharply vs. Bunds.”
  • Elsewhere, Citi observe that “net buying by UK banks also had a late surge to the fastest 3-month pace on record, perhaps responding to cheaper ASW levels. In contrast, non-bank domestic demand fell away in late ‘24 to the slowest 3-month pace since early ‘22, despite higher outright yields, perhaps put off by the domestic uncertainty created by the Budget.”
  • They conclude with “this highlights the efficiency of the gilt market in offering RV to entice one investor group whenever another one may be stepping back.”
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Citi note that “data out at the end of last week completes the picture of who bought all the gilts in ‘24. 45% of ’24 net gilt supply was absorbed overseas, 34% was taken by private domestic investors and 22% was taken by domestic banks.”

  • They note that “this was the fifth time in the last six years that overseas investors have taken the greatest share (‘23 the exception), largely thanks to a strong pick-up in demand in the last quarter, a period in which cable depreciated by over 6% and gilts underperformed sharply vs. Bunds.”
  • Elsewhere, Citi observe that “net buying by UK banks also had a late surge to the fastest 3-month pace on record, perhaps responding to cheaper ASW levels. In contrast, non-bank domestic demand fell away in late ‘24 to the slowest 3-month pace since early ‘22, despite higher outright yields, perhaps put off by the domestic uncertainty created by the Budget.”
  • They conclude with “this highlights the efficiency of the gilt market in offering RV to entice one investor group whenever another one may be stepping back.”