Strong interest in the Greek government bonds in the first quarter 2001
05/04/2001 - Press Releases
The strong interest recorded in the domestic bond market during the
first two months of the year continued in March, accompanied by a significant increase in
turnover and prices. The turnover in the electronic secondary securities market (HDAT)
almost quadrupled from the respective period last year reaching GRD 20,244 billion (EUR
59.41 billion) from GRD 5,466 billion. In parallel, bond prices registered significant
gains between 32 – 240 basis points (bps) during the first quarter 2001.
Bond prices were higher, particularly in the long end of the curve. The
15 and 20-year bonds recorded the strongest gains of 232 – 240 bps respectively
reflecting a decline of 26 and 21 bps in their yields. During this period, the yield
spreads between long-term Greek and German bonds ranged between 60 – 75 bps versus 30
– 50 bps of the respective regional European markets (Spain, Italy, Portugal).
Conversely, the scope of reduction in the short end of the curve was limited, since the
spread between the Greek 3-year bond and its German counterpart was almost the same (about
15 bps) with that of the other regional markets.
The price of the Greek 10-year benchmark (maturing on 18/5/2011) was
higher by 74 bps, closing at 100.55 yielding 5.28% on 30 March from 99.81 (5.37%) on 31
January 2001. Nevertheless, the spread with its German counterpart widened to 58 bps in
March from 55 bps in January and 56 bps in February, as investors turned mainly to the
bigger bond markets of the USA and Germany after the fall of the world stock markets.
The domestic market outlook is expected to be positive with a
continuing strong interest from both international and domestic investors, a fact which is
also reflected in the recent Standard & Poor’s upgrade of the Greek credit rating to
A from A-. Moreover, in the short-term the negative international economic conjuncture
provides a solid support for bond markets.