Unstable demand



13 квітня 2016 года
ICU

After the significant demand seen last week, yesterday the MoF received only five bids for a total of UAH180.6m (par value), all for 3-year bonds at 20.0%, which were fully accepted and provided the state budget with UAH188.03m of proceeds.

This was not the smallest amount of 3-year bond purchasing at the auction. At the end of March 2016, the MoF sold only UAH24.30m of these bonds. In contrast, at the beginning of February, the MoF accepted five bids, as at yesterday's auction, but sold UAH463.74m of these bonds (par value).

Yesterday's auction results indicate that demand for local currency bonds is unstable, and comes from limited number of investors who decided that the cut-off interest rate was profitable. However, the same investors mist likely cannot provide the MoF with significant demand every week. The MoF does not need to borrow a significant amount of funds at high rates.

We could see a slight increase in demand and budget proceeds next week as the MoF should offer new maturities at the short-end of the yield curve along with 2-year bonds instead of the 3-year bonds sold yesterday.

Источник: ICU

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