Record volume for bonds

The prices of government bonds, traded in the Greek electronic secondary securities market (HDAT), fell for almost all maturities in June, in line with international markets, while volume reached a record high, the Bank of Greece said yesterday. Only the 20-year benchmark bond (maturing on October 22, 2022) escaped the trend, posting a small gain of 7 price basis points (bps) The decline in prices was mainly due to investors’ expectations of monetary policy tightening in the US on the back of strong economic data released during the month. Indeed, the FED raised interest rates by 25 bps on June 30. The losses were highest for the five- and seven-year benchmark bonds, of 51 and 58 bps respectively. The 10-year benchmark bond (maturing on May 5, 2014) was trading at 99.63, with a yield of 4.5 percent, on June 30 from 100.00 (4.49 percent) at the end of May. The average monthly yield spread between the latter and its German counterpart narrowed to 18 bps in June from 22 bps in May. Market turnover on HDAT recorded a new historic high in June of 80.48 billion euros (after 61.83 billion euros in May and compared to 61.94 billion in June 2003). The most actively traded bonds were those with remaining maturity between seven and 10 years, which absorbed 59 percent of the overall volume. Amongst individual bonds, the 10-year benchmark recorded the highest traded volume for the fourth month in a row, with 31.14 billion euros’ worth of transactions, followed by the 10-year bond, maturing on May 20, 2013, with 6.79 billion. Of the 14,293 orders executed during June, 51.87 percent were «buy» and 48.13 percent «sell» orders.