Nobody wanted to give in – Finance – Kommersant
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The Ministry of Finance at the latest OFZ auctions has attracted the minimum amount of funds since the fall of 2021. Pre-holiday placement in a tense market forced investors to demand higher yields. However, the ministry cut off aggressive applications, limiting itself to placing 7.25 billion rubles. March placements of government bonds promise to be more fruitful, however, it will be difficult to sell long-term bonds in the conditions of non-decreasing inflation.
Regular OFZ auctions on the eve of the long weekend and in the absence of positive investor sentiment did not promise high results for their participants. According to PSB chief analyst Dmitry Monastyrshin, this week oil prices have fallen, the ruble has updated its lows against the dollar since April last year. According to Vladimir Evstifeev, Head of the Analytical Department of Bank Zenit, the yields of the middle section of the OFZ curve have risen by 30 bps since the beginning of February. n., the far segment – by 15–20 b. In addition, the Ministry of Finance again put up for sale government bonds with a constant coupon (OFZ-PD), which were not very popular among the main players in the market, banks. So it is not surprising that market participants were quite aggressive.
As a result, the Ministry of Finance decided not to place bonds of the first issue with maturity in July 2036 due to “lack of applications at acceptable price levels.”
According to the chief analyst of Sovcombank Mikhail Vasiliev, the day before these bonds were traded at the secondary market with a yield of 10.75% per annum. According to him, market participants were ready to buy this issue with a yield of over 11% per annum. But such a rate clearly did not suit the ministry.
The placement of the second, shorter OFZ issue (due in August 2029) took place. However, the Ministry of Finance also severely cut off most of the applications on it. With a demand of almost 52 billion rubles. investors received securities for only 7.25 billion rubles. This year, the Ministry of Finance placed a smaller volume (of the same securities) a month ago – by 6.5 billion rubles. The weighted average yield coincided with the cut-off yield, barely exceeding 10% per annum.
As a result, the ministry has raised the lowest amount since October 2021. As Dmitry Monastyrshin noted, the low volume of OFZ placement today is connected with the Ministry of Finance’s desire to reduce investors’ expectations of premiums at auctions.
At the same time, market participants, fearing an increase in the initial supply overhang, are not ready to buy large volumes at current levels and “require more interesting conditions,” Vladimir Evstifeev points out.
According to Mikhail Vasiliev, the market was pressured by accelerating inflation and expectations of a key rate increase, fears of an expansion of the budget deficit in the context of a geopolitical confrontation with the West, and expectations of new Western sanctions to be introduced by February 24, the anniversary of the NWO. Thus, weekly inflation by February 13, according to Rosstat, slowed down to 0.18% from 0.26%, but remains above the seasonal norm for the third week in a row. As Mikhail Vasiliev notes, if prices continue to grow, investors will “include an increase in the key rate this year to 8–9%, which will put pressure” on OFZ yields.
At the same time, at auctions in March, in order to fulfill the plan for the first quarter, the Ministry of Finance will have to place on average about 70 billion rubles. But next week the auctions may be more active.
According to Mr. Monastyrshin, the unrealized demand this week “can be translated into bids at the next auctions.”
In particular, since the beginning of the year large banks have formed a record liquidity surplus (RUB 3–3.5 trillion). At the same time, according to Vladimir Evstifeev, the situation on the domestic market is still uncertain, and “market efforts will make it difficult to sell long-term government bonds near the levels of secondary trading.”
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