Serbia sells EUR 10mn in fifth three-month T-bills issue for 2012, yield drops.

By bne IntelliNews October 12, 2012
Serbia sold RSD 1.15bn (EUR 10.1mn) worth of three-month Treasury bills on Thursday, Oct 11, or 23.09% of the total offer, the finance ministry's treasury department said in a statement. It was the ministry's fifth such auction for 2012. The demand was equal to 88% (RSD 4.4bn) of total offer versus 52.3% in the previous three-month T-bills auction, held on September 13. The ministry sold a total of 115,464 securities at an annual discount rate of 12.5%, down from 12.99% in the previous three-month T-bills auction. The newly-sold securities mature on January 10, 2013. The Treasury plans to sell dinar-denominated securities worth RSD 31bn (EUR 270mn) this month after placing only 56.6% of the targeted RSD 53bn in September. It also intends to auction euro-denominated securities worth EUR 150mn in October after placing only 70.3% of the planned EUR 60mn in September. Serbia's primary market of government debt instruments (T-bills, notes and bonds) has saw a fall in the volume of issues and an increase of interest rates since the beginning of the year. Total market value of the sold government securities in RSD and EUR equalled RSD 217.5bn (EUR 1.9bn) in Jan-Sept 2012, down 11.8% on the year, central bank data indicate. The average interest rates on dinar-denominated government securities stood at 13.86% at end-Aug (latest available), up from 13.49% at end-July and 12.46% at end-Aug 2011. We expect the average interest rate on government securities to continue climbing in annual terms reflecting concerns over rising government debt. In its latest edition of the World Economic Outlook report, the IMF revised upwards its general government gross debt projection for 2012 to 63.1% of GDP, up by 9.4pps compared to the previous report issued in April. The IMF expects government debt to GDP ratio to remain above its 2011 level of 46.9% until 2017 (latest available).
Serb government securities primary market 2007 2008 2009 2010 2011 Jan-Sep'11 Jan-Sep'12
Market value, bn RSD 15.84 8.2 202.8 254.8 277.95 246.5 217.5
Return, end of period, RSD bills, % 4.42 9.61 10.34 14.16 11.51 12.54 14.96*
Source: NBS
*IntelliNews calculations

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