By Yoruk Bahceli

LONDON, May 28 (Reuters) - Some official institutions

such as central banks are meaningfully interested in the UK

government bond market for the first time given sharply higher

yields, Natwest Markets' chief executive officer said on

Thursday.

"We had a conference last week, and heard from a lot of

investors that they're really looking at actually engaging with

the gilt market, some of them for the first time. They see rates

as being very good value here," Jonathan Peberdy, chief

executive officer at Natwest Markets, told an International

Capital Markets Association Conference in London.

Asked which investors were looking at the market for the

first time, this includes a number of official institutions or

central banks whose sterling portfolio is relatively small,

Peberdy told Reuters on the sidelines.

In addition to central banks, official institutions also

include sovereign wealth funds and government departments.

"They're considering whether they'll increase their sterling

allocation within their portfolio" he added.

UK government bond yields have risen the most among advanced

economies since the Iran war broke out at the end of February,

with 10-year yields up 60 basis points. Uncertainty over the

future of Prime Minister Keir Starmer and the potential for a

leadership contest has also weighed on the market recently.

Peberdy declined to specify which regions the institutions

were based in but said they were not Asian.

Sterling accounts for roughly 4.4% of global currency

reserves, according to International Monetary Fund data.