Basis point (bps)

RECENT NEWS
The Economic Times  Nov 11  Comment 
The new Reserve Bank framework for non-banking financial companies (NBFCs) is likely to bring down their profitability by around 40 basis points over the next four years, analysts said.
MarketWatch  Nov 7  Comment 
U.S. Treasury yields fell Friday after October nonfarm payrolls data from the Commerce Department showed the U.S. economy added 214,000 jobs in October. The benchmark 10-year Treasury yield saw a 2 basis point drop to 2.3697%. The 2-year yield...
The Times of India  Nov 5  Comment 
Leading public sector banks have lowered some of their term deposit rates by up to 100 basis points as credit growth remains sluggish and liquidity in money markets has improved (100 basis points = 1 percentage point).
newratings.com  Oct 31  Comment 
MOSCOW (dpa-AFX) - Russia's central bank lifted its key rate sharply by a bigger-than-expected 150 basis points to counteract the slide in ruble and rising inflation. The Bank of Russia decided on Friday to raise its key rate to 9.50...
MarketWatch  Oct 14  Comment 
Yield on 10-year Treasury note slides 11 basis points amid global growth fears
The Hindu Business Line  Aug 14  Comment 
Rates slashed for development and innovation projects
newratings.com  Jun 12  Comment 
CANBERA (dpa-AFX) - The NZ dollar firmed up against its key counterparts in early Asian deals on Thursday, as the Reserve Bank of New Zealand hiked its official cash rate by 25 basis points to 3.25 percent, and signaled further tightening in...
SeekingAlpha  Jun 10  Comment 
By John Jansen: The US Treasury will offer the dealer community an opportunity to buy $28 billion of newly-minted 3-year notes today at 100PM. The issue looks cheap on a relative value basis. The WI roll is about 4.25 basis points and that prices...
newratings.com  May 19  Comment 
LONDON (dpa-AFX) - Innovation Group Plc (TIG.L), a provider of business process services or BPS and software solutions, reported Monday that its first-half pre-tax profit declined 29 percent to 4.8 million pounds from 6.8 million pounds last...
MarketWatch  May 2  Comment 
5-year Treasury yield spikes 10 basis points to 1.76% after strong jobs report




 

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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