YIELD TRACKER

YIELDS on government securities (GS) ended mixed last week as investors tracked auction results amid the lack of fresh leads.

GS yields, which move opposite to prices, went up by an average of 0.7 basis point (bp) week on week, according to Philippine Dealing System’s PHP Bloomberg Valuation Service Reference Rates published on June 11.

“Yields saw healthy upward correction week-on-week especially some of the long-end securities due to lack of positive leads and as riskier assets’ gains pick up,” First Metro Asset Management, Inc. (FAMI) said in an e-mail.

For Security Bank Corp. First Vice-President and Head of Wholesale Treasury Sales Carlyn Therese X. Dulay: “Rates were sideways to slightly higher [last week] after the Treasury bill (T-bill) auctions [last] Monday and Tuesday were several times oversubscribed and after a headline on the possibility of additional supply from the BTr (Bureau of the Treasury) was released,” she said in a separate e-mail.

The BTr fully awarded P28 billion in T-bills on Monday, up from the programmed P20 billion, as total tenders reached P96.026 billion or nearly five times the initial offer. This prompted the BTr to open the tap facility to offer another P10 billion in one-year instruments.

On Tuesday, the BTr made a full award of the reissued Treasury bonds (T-bonds) at P30 billion as planned. Total bids for the auction spiked to P124.201 billion, making the offer more than four times oversubscribed. The tap facility was also opened to offer another P20 billion to accommodate the excess demand.

All tenors of the T-bills and T-bonds fetched lower rates.

At the secondary market, yields on the 91-, 182-, and 364-day T-bills were down by 3.9 bps, 4.5 bps, and 4.2 bps, respectively, to fetch 2.033%, 2.126%, and 2.412%.

Yields at the belly of the curve went up except for the 2-year T-bonds, which recorded a marginal decline of 0.6 bp to 2.490%. Meanwhile, the 3-, 4-, 5-, and 7-year debt papers saw their yields go up by 0.2 bp (2.584%), 1.9 bps (2.676%), 4.5 bps (2.788%), and 8.2 bps (3.055%).

At the long end, the 10-year T-bonds saw their rates go up by 2.3 bps, yielding 3.290%. Yields of the 20- and 25-year T-bonds also went up by 2.4 bps and 1.1 bps to 4.163% and 4.272%.

“[The] market may continue to trade sideways with a slight upward bias in the absence of catalysts and as BSP (Bangko Sentral ng Pilipinas) hints for a pause in easing interest rates in its upcoming Monetary Board meeting on June 25,” FAMI said.

“The gradual comeback of term deposit and reverse repurchase facilities will provide better guidance for short-term interest rates while still copious liquidity in the market will prevent any strong pullback in yields across the curve,” it added.

“Expect levels to remain rangebound [this] week as the market waits for more leads,” Security Bank’s Ms. Dulay said. — Jobo E. Hernandez

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