Connect with us

Hi, what are you looking for?

Economy

BTr fully awards reissued bonds as high liquidity boosts demand

THE Treasury bureau fully awarded the reissued 10-year bonds it offered on Tuesday. — WIKIPEDIA.ORG

THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday and even opened its tap facility as the tenor’s yield dropped amid strong liquidity in the market.

The Bureau of the Treasury (BTr) on Tuesday borrowed P30 billion as planned via the reissued 10-year bonds. The auction was more than thrice oversubscribed, with total bids reaching P98.67 billion.

The Treasury also opened its tap facility to raise another P20 billion via the bonds to accommodate the excess demand and take advantage of the low rates seen yesterday.

The reissued 10-year notes, which have a remaining life of four years and eight months, saw its average rate go down by 36.4 basis points (bps) to 2.536% from the 2.9% fetched in the Nov. 17 auction.

National Treasurer Rosalia V. de Leon said the bond auction was met with strong reception from the market, as seen in the oversubscription and the low rates fetched.

“Abundant liquidity coupled with cautious sentiment pulls sentiment to the belly of the curve,” Ms. De Leon told reporters via Viber after the auction on Tuesday.

A bond trader, meanwhile, said the average rate fetched for the reissued bonds was well within the market’s expectation of a 2.5-2.55% range.

“Basically, [investors are] deploying liquidity, [and] the yield pickup is nice. In general, the market is very liquid, awash with cash, so they need it to earn interest,” the trader said via Viber.

Financial markets have been awash with cash since last year as companies hold back on spending and expansion plans and prefer to park their excess funds in safe assets such as government securities amid an uncertain economic environment due to the pandemic.

Liquidity has also gotten a boost from the accommodative stance of the central bank, which last year slashed benchmark interest rates to record lows and also trimmed the reserve requirement ratio of banks.

The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of Treasury bills and P60 billion from fortnightly T-bond offerings.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

TikTok is expected to ride out the advertising slowdown, as the Chinese-owned social media titan becomes an outlier to the wider industry slowdown. According...

Investing

The average start-up loan has fallen over 138 percent in the past year to just over £142k, from £339k in 2021. Thats according to...

Investing

The government risks “sleepwalking” into a food supply crisis unless it provides crucial support for British farmers struggling with the soaring cost of fuel,...

Investing

Britain’s retailers benefited from a November sales boost fuelled by Black Friday discounts and colder weather as consumers bought winter coats, hot water bottles...

Investing

The biggest sector of the economy remained in a downturn last month as new orders continued to fall owing to the cost of living...

Economy

1 of 2 AFTER all their hard work in topping a difficult group and matching the Croatians for 120 minutes, Japan crumbled in the...

You May Also Like

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.