In letters with a term of 3 months, the requests have multiplied by more than four the figure finally awarded
Appetite for Treasury bills has not peaked. The organization led by Carlos Cuerpo went back to the market this Tuesday aware of the strong interest of individuals to invest in a more than safe asset that, in addition, currently practically triples the profitability offered by bank deposits.
And the reaction has been as expected. The Treasury has placed a total of 1,959 million euros in three- and nine-month bills with a demand that has exceeded, and more than, what was offered, with a higher return than that of the previous auction for the same term, held in January.
Specifically, the Treasury has awarded 508 million euros in three-month bills, compared to the 2,204 million that had been requested. In other words, the demand has multiplied the offer by more than four, with an average interest rate of 2.494%, above the 2.18% of the previous auction. The marginal rate stood at 2.52%, also higher than the 2.198% of the previous rate for the same term.
More impressive has been the result in the auction of 9-month bills, in which the Treasury has placed a total of 1,450 million euros against a demand of 4,161.11 million euros. The average interest rate was 2.938%, compared to 2.830% in the previous auction. The marginal rate, for its part, has stood at 2.973%, also above the previous 2.839%.
Surprising, above all, for this short term, it already offers a return similar to that of one-year bills, the star asset so far, which in the last auction stood at 2.983%.
These record interest rates have caused individual investors to spend weeks devouring these assets, considering that they are a safe and much more profitable alternative to their traditional savings formula: bank deposits.
At the moment, financial institutions refuse to improve the remuneration of these savings from their clients. For this reason, more and more individuals are signing up for Treasury auctions. According to data from the organization, so far this year more than 1,100 million euros have been spent on purchases only through its website, to which should be added what citizens buy through the intermediation of their banks or directly in the Bank of Spain, where you already have to request an appointment before the avalanche of requests.
voracious demand
To get an idea of the unstoppable growth in demand, just a year ago purchases barely exceeded 16 million euros among retailers. At the end of last year, they already amounted to 950 million, according to Treasury statistics, with data at the end of November. In any case, and with these official figures, individuals only represent 1.26% of the total holders (only of bills, not of all State debt), although their weight has grown notably from 0.02% of beginning of 2022.
If only bills are taken into account, the ECB, through the Bank of Spain, has been one of the few that has reduced the volumes acquired, going from 6,211 million in January 2022 to 3,523 in November. The latest data available indicate that the agency’s weight in total bills issued by the Treasury has dropped from 7.8% to 4.3%.
A decrease that would be offsetting domestic banking, with figures that have also grown strongly from 8,502 million euros in January 2022, when they accounted for 10.7% of the total, to 14,416 million (19.04%). The rise has also been notable in the segment of non-financial companies, which have gone from holding 0.32% of Treasury bills with 253 million euros, to assuming a holding of 1.90% (1,437 million euros in November).
In any case, the greatest weight continues to be carried by foreign investors, who currently account for 58.9% of the total, with 44,594 million euros. The figure has dropped significantly from 70% at the beginning of 2022 (55,552 million). But keep in mind that these statistics are only those corresponding to short-term debt issues. In bonds and obligations, its presence continues to grow month by month.
Precisely, this Thursday the Treasury will go back to the markets to place between 5,500 and 6,500 million euros in bonds. We will have to wait for the result of the auction to see who and how much continues to bet on the Spanish public debt.
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