UK - FTSE has launched a market consultation exercise seeking comments on the development of a new UK focused corporate bond index, which it says reflects the decrease in the supply of UK gilts and the search for alternative investment opportunities.

The index is expected to comprise of fixed rate bonds, zero coupon bonds, graduated rate bonds and bonds with serial redemptions, and the consultation exercise asks market users for views on a range of issues affecting the index design, including inclusion and exclusion of types of bonds, liquidity levels and valuation bands.

The consultation will close on Wednesday September 19 and the on-line questionnaire is available at

Carl Beckley, director markets development at FTSE, comments: “As the supply of UK gilts decreases the market is looking for alternative investment opportunities - this need is being met by a steady increase in corporate bond issues. The new FTSE Corporate Bond index will complement the FTSE Gilts index and will meet the needs of investors in UK corporate bonds.”

Final details of the index design, including comprehensive ground rules, will be announced in early 2002.