ECB Policy Turns Foreign Investors Into Net Sellers of Euro DebtBy
Net sales by non-euro area residents reached 192 billion euros
ECB says portfolio shift driven largely by quantitative easing
Foreign investors sold more euro-area bonds than they bought last year for the first time since the introduction of the common currency in 1999, the European Central Bank said.
Their net sales of the region’s debt securities reached 192 billion euros ($207 billion) after 30 billion euros of net purchases in 2015, the ECB said on Monday in an article to be published in its economic bulletin. The result reflects the net sale of 116 billion euros in government bonds, which the ECB said related “to a significant extent” to its quantitative-easing program.
At the same time, investors from outside the euro area continued to plow their money into the region’s stocks, even though net purchases fell to 126 billion euros last year from 268 billion in 2015.
Euro-area residents also continued to shift their investments to debt securities from outside the region, a process that began in the second half of 2014. Net purchases reached 364 billion euros last year. Investment in non-euro area equities “remained subdued,” according to the report.