The Government Debt Management Agency (AKK) sold HUF 60 billion of three-month discount T-bills at an auction on Tuesday, raising its sales as oversubscription rose further. Despite continued strong demand, yields rose for the second auction in a row.
AKK sold HUF 60 billion of the bills, HUF 10 billion more than announced after receiving bids for HUF 163 billion. Demand jumped from levels over HUF 130 billion at the past three auctions and was unmatched since an auction drew bids for HUF 160 billion on April 27.
Average yield was 5.47%, up 9bp from the average yield at the previous auction of the bills one week earlier, and 2bp above the yield of the secondary market benchmark, which matures one weeks later than the bill offered. Yields ranged between 5.43% and 5.50%. A week earlier, the range was between 5.28% and 5.40%.
Oversubscription at the weekly auctions has been high, at well over HUF 100 billion, since late July, and AKK raised its offer from HUF 45 billion to HUF 50 billion at the auction on August 10.
A big bond expiry last week boosted auction demand, as many investors decided to wait until short-term instruments offer an attractive return instead of reinvesting in bonds, a trader told Econews. Large oversubscription at the past few auctions has reflected a shift away from long to short investments, she added. Yields rose as risk aversion grew on global markets, she explained. (MTI-Econews)