What is a Bulldog Market
Bulldog market is 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 market is different than the United Kingdom’s external bond market, where bonds not issued in the United Kingdom can be traded. The Bulldog market is associated with Bulldog bonds, which is a bond issued by a foreign party in the United Kingdom market. These bonds would use be issued in a denomination of British pounds.
Bulldog market gets its name from a beloved companion popular with residents of the United Kingdom and surrounding regions. The “bulldog” in Bulldog market pays homage to the English Bulldog, also known as the British 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 Rembrandt market in the Netherlands, Yankee market in the United States, Matador market in Spain, and Samurai market in Japan.
Popularity of the Bulldog Market
The United Kingdom, especially the city of London, is a popular location for companies looking to find financing. In fact, many financial experts have long considered London 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.
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. Investors from the U.S. or elsewhere outside the U.K. who are seeking to participate in the Bulldog market must carefully weigh the risks of investing in this market against the potential rewards.
The Bulldog market should not be confused with a bull market, which is a term that describes a market on the rise.