Basis point (bps)

RECENT NEWS
The Hindu Business Line  Dec 6  Comment 
Most analysts expect Reserve Bank Governor Urjit Patel to announce a 0.25 percentage point interest rate cut at the end of the two-day policy review meet on Wednesday. However, there are expectation...
MarketWatch  Dec 2  Comment 
Treasury yields declined on Friday after the November jobs report showed the U.S. economy added 178,000 jobs last month, slightly below expectations. The 10-year yield fell five basis points to 2.399%, while the two-year yield shed 3.5 basis...
Reuters  Dec 1  Comment 
China National Chemical Corp (ChemChina) is setting up a fund that will aim to raise $5 billion to help finance its purchase of Swiss seeds group Syngenta, two sources with direct knowledge of the matter told Thomson Reuters publication Basis Point.
The Hindu Business Line  Nov 23  Comment 
Non-banking finance companies (NBFC) share of overall loans in the financial sector is seen rising 300 basis points (bps) to 17.6 per cent in the next three fiscals through 2019, even as the spoils c...
The Hindu Business Line  Nov 21  Comment 
Singaporean brokerage DBS has warned of major downside risks to growth due to the demonetisation exercise, and has estimated that the gross value added can come down by up to 0.80 per cent lower than...
The Economic Times  Nov 7  Comment 
If holding company Tata Sons decides not to renew guarantees, borrowing costs could jump 50-100 basis points, said bankers.
MarketWatch  Nov 4  Comment 
Treasury prices moved marginally lower Friday, pushing up yields, after the Labor Department said the U.S. economy added 161,000 jobs last month. Two-year notes saw the sharpest rise, adding 1.6 basis point to 0.822%, as the data was seen...
Clusterstock  Oct 27  Comment 
Longer dated US Treasury yields are at their highest level since May following Thursday's better than expected pending home sales for September. Data released by the National Association of Realtors showed pending home sales rose 1.5%...
MarketWatch  Sep 21  Comment 
Treasury yields erased their early increase to trade largely unchanged on the day after the Federal Reserve kept interest rates unchanged but strongly signaled a rate hike was likely before the end of the year. The yield on the two-year Treasury...
The Hindu Business Line  Sep 13  Comment 
RBI is expected to go for a 50 basis points rate cut over the remaining months of the fiscal as inflationary pressure is expected to stay contained thanks to good monsoon and falling vegetable prices...




 

For the article on the company with ticker BPS, see BlackRock Pennsylvania Strategic Municipal Trust (BPS).

A basis point (abbreviated as 'bps' and sometimes pronounced "bips") is a unit that is equal to 1/100th of 1%, and is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

It is common practice in the financial industry to use basis points to denote a rate change in a financial instrument, or the difference (spread) between two interest rates, including the yields of fixed-income securities.

1% change = 100 basis points, and 0.01% = 1 basis point.

So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points. The marginal effect of each basis point change in the value of long term bonds can be very significant for this reason changes are tracked by basis points or 1/100th of 1%

Since certain loans and bonds may commonly be quoted in relation to some index or underlying security, they will often be quoted as a spread over (or under) the index. For example, a loan that bears interest of 0.50% per annum above the London Interbank Offered Rate (LIBOR) is said to be 50 basis points over LIBOR, which is commonly expressed as "L+50bps" or simply "L+50"

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