The author looks at foreign ownership of Danish bonds and the variations which have occurred throughout the last five years in yield spreads, "non-EMU member spreads" and expectations for central banks.
In general, foreign investors have reduced their share of Danish government bonds and increased their share of Danish mortgage bonds. The trend has been towards a lower foreign ownership of Danish government bonds as the total outstanding amounts in the Danish government bond market have been reduced.
Allan Hansen concludes that the foreign investors are price-sensitive and increase the share of Danish government bonds when the spreads are high and reduce the share when the spreads narrow. This tendency also applies to changes in the mortgage spreads.
Read Focus no. 16 at http://www.xcse.dk/uk/nyt/Borsfokus/Borsfokus.asp. Questions to the authors of the article can be sent to the e-mail address info@xcse.dk until 16 May 2002.
