The Ministry of Finance reduces the variable – Newspaper Kommersant No. 233 (7434) dated 12/15/2022
[ad_1]
The Ministry of Finance made adjustments to the tactics of borrowing in the debt market, reducing the supply of floating-rate government bonds popular with banks and placing more emphasis on OFZ with a constant coupon. The placement of these securities did not require a high premium, which was previously demanded by market participants. Experts believe that, taking into account the auction next week, the Ministry of Finance will be able to fully fulfill the annual borrowing plan and create a reserve in case of problems in 2023.
Despite repeated overfulfillment of the quarterly plan (see “Kommersant” of December 8) to raise funds in the debt market, the Ministry of Finance continues to actively place government bonds, although slightly below record volumes. Based on the results of three OFZ auctions – with a floating (OFZ-PK, floater) and a fixed (OFZ-PD) rate, as well as with a variable par value (OFZ-IN) – the agency raised almost 352 billion rubles, the third largest result this year .
This time, the Ministry of Finance limited the supply of government bonds with a floating coupon to the amount of 250 billion rubles, three times lower than a week earlier.
Demand for these securities more than doubled the available balance, which made it possible to place them in full. According to Alexander Yermak, chief debt markets analyst at BC Region, 94 applications were satisfied, 13 of which accounted for about 90% of the placed volume. Moreover, two applications were for 50 billion rubles, one application for 25 billion rubles. and ten applications for 10 billion rubles.
The anchor buyers of floaters are traditionally state-owned banks. Mikhail Vasiliev, chief analyst at Sovcombank, does not exclude the possibility that the Finance Ministry and state-owned banks could coordinate the needs of the budget and the possibilities of buyers, taking into account past placements. Earlier this quarter, OFZs worth 2.5 trillion rubles were placed, more than 80% of which were floaters. “The formed liquidity reserve allows the Ministry of Finance to reduce the volume of borrowings compared to last week’s auctions,” said Dmitry Monastyrshin, chief analyst at PSB.
At the same time, the Ministry of Finance increased the supply of government bonds with a constant coupon, the placement volume of which exceeded 90 billion rubles. This was a record high this year.
In addition, the Ministry of Finance satisfied 43% of applications, while a week earlier it was limited to only 5% of demand. “Six large bids accounted for more than 83% of the placed volume, while three bids were worth RUB 20 billion each,” said Alexander Yermak. At the same time, the yield on the cut-off price amounted to 10.14% per annum. As Dmitry Monastyrshin points out, the premium was only 5 basis points to the yield of the previous day’s close.
Andrey Zaitsev, deputy director of the investment and trading department of Absolut Bank, believes that the Ministry of Finance offered a relatively small amount of floaters in order to somehow increase the volume by placing OFZ-PD. Moreover, after the redemption of a large OFZ issue last week, there is a high demand for such securities on the market, and the yields generally satisfy the ministry. “Obviously, on the eve of 2023, with a planned serious budget deficit and uncertainty on the revenue side, there is not much room for lowering rates,” Mr. Zaitsev notes.
At the same time, the demand for “inflationary” government bonds (OFZ-IN) was small (11.7 billion rubles), and the Ministry of Finance satisfied it almost in full (10.6 billion rubles). In total, four applications were satisfied, two of which (5 billion rubles each) accounted for the lion’s share of the issue. The weighted average yield was 3.32% per annum, providing a premium of 0.15 percentage points to the secondary market, Alexander Yermak notes.
A week later, on December 21, the last OFZ auction this year will take place. And market participants expect at least a repetition of the results of the current week.
According to Mikhail Vasiliev, banks will take a new floater for all the proposed 250 billion rubles, and the total volume of placement will be 300-350 billion rubles. Thus, the Ministry of Finance will be able to fully implement the original plan for this year in the amount of 3.26 trillion rubles. “In general, the ministry is creating a reserve for next year, when the budget deficit will be about 3 trillion rubles. and will be covered mainly by government bonds,” notes Mr. Vasiliev. Therefore, he is sure, “as long as there is demand, the Ministry of Finance will continue active placements.”
[ad_2]
Source link