Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

INVESTMENT FOCUS-Any ECB move into stocks unlikely to be plain sailing

Sept. 6, 2016

INVESTMENT FOCUS-Any ECB move into stocks unlikely to be plain sailing

* Analysts say all options on the table for the ECB

* BOJ buying of stocks sets precedent for the euro zone

* ECB would struggle to match BOJ's equity purchases

* Euro zone scheme seen as far more complex than Japan

* Europe, Japan ETF graphic: tmsnrt.rs/2bZ1IkA

By Dhara Ranasinghe and Atul Prakash

LONDON, Sept 2 The ECB may soon be forced to follow the Bank of Japan's example and buy equities as part of any expanded stimulus programme, but it faces significant hurdles in helping all 19 euro zone members equally without distorting a key market for investors.

The European Central Bank could run out of eligible bonds for its 1.7 trillion euro bond-buying scheme, meaning alternative options are on the table should it decide to loosen policy further to lift growth and inflation across the bloc.

Analysts say these could include large-scale share buying, a policy that the BOJ has already adopted after it started purchasing equity exchange traded funds (ETFs) for its own quantitative easing scheme six years ago.

ETFs allow an investor to trade a range of assets, from a basket of stocks to government debt. ETFs, which offer a convenient way to purchase a broad basket of securities in a single transaction from an exchange, have risen in popularity with investors due to their simplicity and lower fees.

But buying ETFs in the 19-nation euro zone would be far from simple for the ECB, both practically and politically.

To continue reading please click link http://uk.reuters.com/article/eurozone-ecb-etfs-idUKL8N1BE190