DEFINITION of 'Bulldog Market'

A nickname for the foreign bond market of the United Kingdom. The Bulldog market is the internal market in which the securities of issuers not living in the United Kingdom can be bought and sold. These securities are quoted in British pounds sterling.

BREAKING DOWN 'Bulldog Market'

The “bulldog” in Bulldog market pays homage to the English bulldog, which is considered a national mascot of England and the United Kingdom. The foreign markets of several other countries have also received nicknames, including the Netherlands (“Rembrandt market”), United States (“Yankee market”), Spain (“Matador market”), and Japan (“Samurai market”).

The United Kingdom, especially the city of London, is a popular location for companies looking to find financing. London, in fact, has long been considered the financial capital of the world. The British pound sterling is one of the staple currencies of the world financial market, and investing in bonds denominated in pounds is considered a more sound investment because of its relative low risk. The Bulldog market is different than the United Kingdom’s external bond market, where bonds not issued in the United Kingdom can be traded.

Another reason for the popularity of the United Kingdom’s foreign bond market is the historical reach of the British Empire, which at one point included large markets such as Australia, Hong Kong, and India. By issuing bonds in British pounds, companies were more likely to face reduced risk since the pound was a dominant currency in so many different locations and markets.

Companies raising funds in the Bulldog market must follow British financial regulations, with the historical stability created by Britain’s rule of law acting as another reason why its foreign market is popular.

The Bulldog market should not be confused with "bull market", which describes a market on the rise.

 

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