Post by
Vega1357 on Mar 21, 2022 9:20am
Increase in government bond yields will doom NPI share price
NPI has been doing well of late, but with the recent increase in government bond yields all across the board, this will start to pinch the share price. This morning the yield on the 10 year GOC is up eight basis points to 2.28%, and with the increase in inflation due to the Ukraine war, etc., there's no immediate end to these increases in sight.
Comment by
BayWall on Mar 21, 2022 9:48am
Very true. Higher interest rates is like slowly applying the brakes. Global conflicts also impede progress.--UN chief warns Russia's war in Ukraine could set back climate goals (yahoo.com)
Comment by
Dibah420 on Mar 21, 2022 10:14am
Question remains: Why would I want to tie up my capital for TEN YEARS at a measly 2.28% which is FIVE POINTS BELOW the current inflation number?
Comment by
BayWall on Mar 21, 2022 12:58pm
The "real rate of return" is negative.
Comment by
Vega1357 on Mar 21, 2022 9:10pm
The spread between NPI's dividend yield and the yield on the GOC 10 year bond is now only 50 basis points. That is the lowest spread for NPI I have ever seen, which is not particularly bullish for the stock.
Comment by
Vega1357 on Mar 22, 2022 10:02am
This morning the 10 year GOC bond is up another 7 basis points to 2.80% putting further downward pressure on NPI. How much longer before the share price totally crumbles?
Comment by
BayWall on Mar 22, 2022 11:40pm
The bond market is tanking. If interest rates go up, bond values drop and investors go into stocks. Bond rout pushes cash back in to stocks (msn.com)