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Developments in the Greek government bond market: April 2011

17/05/2011 - Press Releases

On the electronic secondary securities market for Greek government bonds (HDAT), prices fell and yields rose significantly in April. The same development was observed in other so-called “peripheral” euro area markets, in contrast to the positive government bond performance in countries with the highest credit rating, such as Germany and the US.

In particular, with regard to Greek government benchmark bond prices, the 3-year bond price fell to 61.29 at the end of April from 81.90 at the end of March, the 10-year bond price declined to 55.94 from 65.28 and the 30-year bond price to 50.16 from 54.55 respectively.

As for Greek government bond yields, the 3-year benchmark bond yield, which recorded the highest increase by 856 basis points (bps), reached 23.67% at the end of April, while the 5-year benchmark bond yield rose by 498 bps, to 21.13%. In the longer tenors, the 10-year benchmark bond yield rose by 271 bps to 15.59% and the 30-year benchmark bond yield by 76 bps to 9.82%. As a result, the yield curve remained inverted and steepened, with the difference between the 30- and the 3-year bond yields reaching the level of -1,384 bps at the end of April from -605 bps at the end of March.
The average monthly spread between the Greek and the German 10-year bond yields was 1,049 bps in April compared with 919 bps in March.

Trading volume on HDAT in April rose to EUR 1.4 billion compared with 974 million in the previous month and EUR 10.6 billion in April 2010. The daily average turnover was EUR 73.9 million compared with EUR 46.4 million during the previous month. Investor interest was mainly focused on bonds with maturities under 3 years, which absorbed EUR 1.05 billion worth of transactions, or 74% of the overall trading volume. Of the 1,220 orders executed on HDAT, 85.3% were “sell” orders and 14.7% “buy” orders.





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