Government to raise ¢1.816bn in T-bills this week; bond market trading slumps

The government will raise ¢1.816 billion in treasury bills this week to refinance the upcoming maturities of ¢1.665 billion.

The government secured ¢2.76 billion from T-bills sales last week.

The amount realized surpassed the auction target of ¢1.852 billion by 48.41%. Also, the accepted amount exceeded the government T-bills refinancing obligation by 69.72%, sustaining buffer build-ups for three successive weeks.

The Ministry of Finance at a press conference clarified the debt exchange program, which included consolidating all existing bonds into four bonds and extending all bonds as of December 1, 2022, to now mature in 2027,2029,2032,2037. Coupon payments associated with this debt exchange program are 0% in 2023, 5% in 2024, and 10% from 2025 till maturity.

Analysts believe the exemption of T-bills from this program would boost investor demand as they offer more attractive returns.

Bond market trading slumps 57.30%

Last week, trading activity on the bond market slumped by 57.30% as the aggregate market turnover amounted to ¢2.03 billion.

It is believed that the subdued market activity was primarily due to a shorter trading week.

November 2026, May 2023, and March 2031 were the most traded papers as executed trades amounted to ¢733 million, ¢229.45 million, and ¢104.56 million, respectively. They jointly accounted for 52.52% of market turnover.

Liquidity, however, improved slightly in the market as funds from the matured on November 28, 2022.

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