The government bond auction on Thursday was a big success, and “if the situation is like the one now” the Government Debt Management Agency (ÁKK) could raise further its offers at bond auctions, ÁKK deputy-head László András Borbély told Econews.
ÁKK will continue to offer the same three bonds at the auctions, Borbély said. It will offer neither new bonds or new terms for the time being, he added.
ÁKK sold HUF 31 billion of bonds at the auction on Thursday, raising its original offer by HUF 7 billion after receiving bids for HUF 111 billion. ÁKK had raised its original offer for the auction to HUF 24 billion from HUF 15 billion at the previous ones.
The bigger initial offer could have raised interest, though Parliament's approval on Monday of the government's 2010 tax package also improved the mood, Borbély said. ÁKK was cautious when raising its original offer for the Thursday auction as most primary dealers surveyed in the previous week did not signal a big increase in demand, he added.
If the current favorable market conditions remain, ÁKK will talk with dealers again and could raise the amount of bonds its offers at the next auctions, he said.
ÁKK will maintain the non-competitive after-auctions it introduced in May, Borbély said. ÁKK sold a further HUF 10.7 billion of the bonds at a non-competitive after-auction, at which dealers can by up to 40% of the bonds they bought at competitive price bids at the auction at the average price of the sale. Non-competitive bids at the auction itself are limited to HUF 200 m per bond per bidder, so the sale at the after-auction tenders can increase as the offers rise, he noted.
ÁKK is raising its offers for all government securities: in the coming week, it will offer HUF 50 billion of twelve-month T-bills, up from the earlier offers of HUF 40 billion, and it will also offer more three-month T-bills, temporarily, to giving investors a short-term instrument as an option for HUF 240 billion in bonds maturing in June and almost HUF 400 billion of bonds maturing in August, Borbély said. The three-month T-bills can attract investors from the National Bank of Hungary's two-week zero-coupon bonds, he added.
NBH two-week zero-coupon bond stock has grown to almost HUF 3,000 billion, triple the amount in September.
ÁKK has sold HUF 2.1 billion of three-year inflation-pegged bonds to retail investors since it introduced them in the middle of May, which Borbély termed as good. The bonds has attracted retail investments from discount T-bills as sales tend to rise at the time of discount T-bill maturities, he noted.
ÁKK aims to start exchange auctions, at which investors can trade bonds up for repurchase for newly issued ones, Borbély said, confirming plans announced in April. Legal and technical preparations for the sale are underway, he added.
Reverse auctions return to their previous schedule, Borbély said, adding that they were already less frequent in June after being held every week in April and May. ÁKK will return to buying back bonds maturing this year or in 2010, though it does not exclude repurchasing longer runs, he said. (MTI-Econews)