Bond prices fall in July, trading remains strong

In line with international trends, Greek government bonds trading on the electronic secondary market (HDAT) recorded significant losses in July, according to data released by the Bank of Greece yesterday. Prices fell in the range of 59-264 basis points (bps), eroding almost all gains made from around mid-April until mid-June. The 20-year bond (October 22, 2022) recorded the greatest price decline, closing July at 112.29 (with a yield of 4.90 percent) down from 114.93 (4.70 percent) at the end of June. The 10-year average yield spread over German benchmark bunds reached a new historic low of 13 basis points in July compared to 15 bps in June. Trading activity remained strong, with a total turnover of 60.34 billion euros, after this year’s record of 61.94 billion in June and compared to 46.24 billion in July 2002. Sell orders represented 52.77 percent of the 10,561 orders executed during the month while buy orders were 47.23 percent. Investors’ interest remained focused on bonds with remaining maturity until 10 years, which attracted 78 percent of the total turnover. The 10-year benchmark bond was the most actively traded, with a volume of 15.59 billion euros, and its liquidity, as measured by the ratio of the monthly traded volume over the amount outstanding, rose to 22 percent in July from 213 percent in June.