Monday , September 23 2019

Central banks boost holdings of equities beyond $1 trillion

Bloomberg

The central banks have increased their holdings of equities beyond $1 trillion last year as they sought to diversify their reserves away from low-yielding bonds, according to a
survey to be published.
Monetary authorities boosted their allocation of equities to 10 percent of their reserves despite recent market volatility and a quarter of them said they plan to purchase more stocks in the next two years, research group OMFIF said.
Behind the buying is the need for central banks to find ways to keep their reserves growing after their own easy monetary policies suppressed bond yields worldwide. The Bank of Japan, Bank of Israel and Swiss National Bank are among those to have publicly disclosed investments in stocks in the past.
Central banks are still wary of taking on too much risk no matter the returns on offer. Their holdings are minuscule when compared to the $77 trillion of outstanding equities.
The share of investments in corporate bonds rose to 7 percent last year and 15 percent of respondents planned to purchase more in the next two years.

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