From Aldesa's Pulso Bursátil Blog
Interest rates or income paid by the Ministry of Finance for the deposits in colones faced some upward pressure today.
The auction of bonds maturing in April 2013 that traded on the secondary market at a yield of 8.95%, was assigned 9%. In addition, bonds maturing in 2017 were also assigned a slightly lower price than that offered in the last auction. The bond maturing in 2015 was in demand, with a yield equal to the secondary market of 11%.
Last week we looked at the great players picking up at 6 months, with 10% in the stock market competing for increasingly scarce colones circulating in the banking system.
In the liquidity market, getting colones in one day now costs between 5.99% and 6.25%, while for one month repurchases yields were observed up to 9%.
While the colones in current accounts have almost disappeared (as of April the annual variation is -3%) colones in savings accounts and term certificates are growing at rates close to 23% and 10% respectively, indicating that people have used the improved conditions to "park" their colons.
The main attraction of today's auction was the dollar-denominated bond maturing in November 2013, it received bids for $52.8 million and the Ministry of Finance took steps to capture them, as this amount is greater than the remaining balance of the bond.
More on this topic
In an auction of long-and short-term bonds the treasury issued just under $26 million, paying a premium slightly higher than that in the secondary market.
ALDESA's blog reads:
Little Interest in Government Bond Auction
The treasury held an auction of bonds in colones on Monday in the primary market, where investors through brokers-dealers could buy at a certain price and performance.
There has been a decrease for the fifth consecutive week of the base borrowing rate by the Central Bank of Costa Rica, settling at 8.6% today.
This indicator is a weighted average of the interest rates in colones on gross collections, by financial intermediaries negotiated by domestic residents and the interest rates of deposit instruments of the Central Bank and Ministry of Finance negotiated both in the primary and secondary market, each corresponding to periods of between 150 and 210 days.
The Finance Ministry initially offered $10 million in certificates but after a surge in demand ended up issuing $62.8 million in dollar bonds maturing in 2025.
Although the initial amount put up for auction was $10 million, bids for these certificates in the market totaled $65 million, that is to say 6.5 times the amount to be auctioned.
The change in the Basic Passive Rate of 11% to 11.25% announced by the Central Bank of Costa Rica goes into effect today.
According to Elfinancierocr.com, “This is the first rise in the last four weeks. Since June 11th, it has been at 11.0%.”
The basic passive rate is an average of saving interest rates in colones for terms of 150 days (5 months) and 210 days (7 months). It is used as a reference for loans.