Local Government Securities Market
Speculation on the possible rate of fresh 3-year RTB on offer next week likely drove today's two-way activity. With early indications for the coupon seen as high as 4.25%, bonds on the belly saw some hit bids as players adjusted levels. Yields for FXTN 5-74 (4.8yrs) and 10-60 (8.4yrs) initially reached as high as 4.32% and 4.615%, each. Some investors, however, saw this as a buying opportunity and lifted offers to counter. Above-mentioned bonds closed at 4.28% and 4.60%, respectively. Other bonds saw just sideways activity with upward bias. Volume today was at a cool Php 7.7 Bn.
Week-on-week, yields are up 2.5 - 9 basis points following the announcement of the RTB offering. Trading acitivity, however, was very limited as most market participants await fresh leads. Off-shore developments, which includes but is not limited to the vote of the US healthcare law as well as the London attack, did not help in boosting the sentiment of the market.
Investors will likely focus on RTB offering next week. Players will also keep an eye on initial BSP forecasts