Yield of benchmark Tbills slides at auction

Monday, 06 August 2012 20:11 VG Cabuag / Reporter

  

YIELD of the benchmark 91-day Treasury Bills decreased during Monday’s auction, but the rate of the one-year paper slightly increased as investors preferred to place their funds on shorter-term debt.

The rate of the 91-day T-bills slid to 1.495 percent, some 30.5 basis points compared with the yield it fetched some two weeks ago of 1.8 percent.

Tenders reached P5.77 billion, or five times more than the government’s offer of P1 billion. The auction committee, chaired by National Treasurer Roberto Tan, made a full award.

At the secondary market, the said paper is being traded at 1.845 percent, or 35 basis points higher than the government awarded rate. 

ENJOY GOOD LIFE + INVESTMENT, CLICK HERE 

 

Meanwhile, the rate of the 182-day paper also went down to 1.795 percent or 32.2 basis points lower than the previous rate of 2.117 percent.

Tenders reached P10.6 billion and the government made a full award of P2.5 billion.

The said tenor is being traded at the secondary market at 2.115 percent.

It was a different story, however, for the 364-day paper as the yield moved higher to 2.422 percent, or 14.3 basis points higher than the previous yield of 2.279 percent.

Tenders reached P4.93 billion, or just more than the government’s offer of P4 billion. The government made a partial award of P3.6 billion.

The auction committee had to calibrate the rate to prevent the rates from increasing. Had the government made a full award, the rate would have climbed to 2.443 or higher by 16.4 basis points.

The one-year paper is being traded at the secondary market at 2.375 percent.

Tan said investors who placed a high bid during the previous T-bills auction two weeks ago maintained their bid, while those who made a lower bid increased their asking rate.

“As a result, the difference of the spread between the high [bid rates] and low narrowed down, resulting to a higher average rate,” Tan said after the auction.

He said the high liquidity in the market has pushed investors to park their money on a much shorter term notes rather than the one-year paper.

During the first half, investors opted for longer-term investments and have shunned the other debt tenors like the three-month and six-month papers, prodding the government to halve its offering for the 91-day paper to just P1 billion but increased the other tenors such as the six-months and the one year paper.