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IBRD bonds highly traded on Stock Exchange

The Bucharest Stock Exchange has recently seen increased transactions with listed bonds, while their value grew significantly, exceeding in the past days the transactions made with the most liquid shares on the Stock Exchange.

The bonds of the International Bank for Reconstruction and Development (BIRD) due in September 2009 were traded on Monday, Nov. 17, in 14 transactions amounting to 7.71 million lei (2.06 million euros), whereas the total value of the share transactions performed the same day did not exceed 2.8 million euros and the share transactions conducted by the Financial Investment Companies (SIF) reached nearly 400,000 euros.

Since the beginning of November the bonds transactions on the Stock Exchange totalled 24.46 million lei (6.61 million euros), some 6.3 million euros of which represent IBRD bonds transactions.

Brokers put the increased liquidity on the bond market on the investors' interest in alternative investments, as well as on the liquidation by foreign investors who made investments, including in bonds. 'Investors are probably looking for investment alternatives and bonds are an accessible option, as they are listed on the Stock Exchange', managing director of Carpatica Invest Marius Trif told the Ziarul Financiar daily.

The price of IBRD bonds significantly fell by 8 percent from 100 lei (nearly 27 euros) at the beginning of September to 92.1 lei (24.56 euros) in the Monday session.

'Large investors with a portfolio of deposits, bonds and shares were written off, due also to the increased deposit interest rates', Trif said.

The interest rates to leu deposits significantly rose in the past nine months, thus reaching 12 to 13 percent, almost double the fixed interest rate of 6.5 percent a year paid to the IBRD bonds. Under these circumstances, the price decrease is a normal consequence in order to place the yield achieved by the bond investor close to that of other instruments existing on the market. The annual bond yield increases to 7 percent at a bond price of 92.1 lei. The BCR bonds due in November 2009 also posted a significant plunge, being traded for some 92 lei, while their nominal value is 100 lei and the annual coupon amounts to 7.25 percent.

Municipal bonds have been traded since the beginning of November, with the highest figures reported by the titles issued by the Eforie Town hall due in 2017 and the Timisoara bonds due in 2026.

There are currently six issues of corporate bonds listed on the Stock Exchange, two of which are international, 20 issues of municipal bonds and 24 issues of public securities.

 

Sursa: http://www.rompress.ro

Tags: bonds million percent euros transactions traded exchange stock bcr sif

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