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Retail govʼt security stock grows in Q4, lifted by Plusz bond

Outstanding stock of forint retail government securities rose HUF 281.5 billion to HUF 9.074 trillion in the fourth quarter of 2019, almost entirely due to subscription of the Hungarian Government Security Plusz bonds which launched in June, the Government Debt Management Agency (ÁKK) said on Friday, state news wire MTI reports.

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Sales of the Plusz bond, which pays an annualized yield of 4.95%, if held for the full five-year maturity, reached HUF 1.072 tln in the fourth quarter. Stock of the bond, which attracted record demand in the month of June, came to HUF 3.196 tln at the end of December.

ÁKK data suggest retail investors redeemed some of their government securities and plowed back their savings into the Plusz bond. Retail investors redeemed net HUF 393.5 bln of One-Year Government Securities (1MAP) in Q4, reducing stock of the security to HUF 2.158 tln. Retail investors also redeemed net HUF 214.3 bln of Premium Hungarian Government Securities (PMAP), reducing stock to HUF 2.518 tln.

ÁKK noted that it had repurchased HUF 194 bln of the PMAP bond from banks that investors had redeemed early in Q4.

Stock of Treasury Savings Bills (KTJ) fell HUF 7.8 bln to HUF 446.9 bln, and net sales of Baby Bonds (BABA) came to HUF 9 bln, raising the stock to HUF 79.7 bln.

Among the retail securities which the government no longer issues, stock of Treasury Savings Bills Plusz (KTJP) fell 26 bln to HUF 8.3 bln, stock of Two-year Government Securities (2MAP) dropped HUF 64 bln to HUF 215.2 bln, stock of Bonus Hungarian Government Securities (BMAP) edged down HUF 6.4 bln to HUF 451.4 bln and stock of Six-Month Government Securities (FMAP) declined HUF 87.7 bln to zero.

Including euro-denominated retail government securities, the total outstanding stock of Hungarian government securities reached HUF 9.227 tln at the end of Q4.

ÁKK aims to raise the stock of state debt held by households to HUF 11 tln by the end of 2023.