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Stock of domestic eurobond drop below €1 bln on net redemptions in March

MNB

The stock of three-year Premium Euro Bond (PEMAK) fell to €977.7 million by the end of March as investors purchased €25.8 million of the bonds and redeemed €472.3m early in March, the Government Debt Management Agency (ÁKK) said on its website on Monday. PEMAK, Hungary's first domestic euro-denominated government bond, was launched last November, and stock reached nearly €1.45 billion by the end of February. ÁKK sold €309 million of by the end of 2012, sold an additional €1.037 billion in January and a further €104 million in February before redemptions exceeded new purchases in March. Retail and foreign investors were net buyers and domestic institutional investors were net sellers of the PEMAK bonds in March, ÁKK figures show. Market rumor holds that Mol might have been behind both the large buy in January and the large redemption in March. The share of retail investors in the total stock rose to 18.5% at the end of March from 11.3% at the end of February, domestic institutional investors' share fell to 76.8% from 85.7% a month earlier and foreign investors' share rose to 4.7% at the end of March from 3% of the total, the debt manager said. ÁKK noted that the State Treasury continuously quotes a redemption rate for the bonds and the other nine distributors of PEMAK bonds are obliged to quote redemption rates to keep a liquid market for the bonds. Distributors are Citibank Europe, Concorde Értékpapír, Erste Befektetési, FHB Bank, ING Bank N.V., TakarékBank, OTP Bank, Raiffeisen Bank and Sopron Bank.

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