Investors eye first T-bill sale of the new year

Market sentiment in the coming days is likely to be shaped by the results of tomorrow’s treasury bill auction after blue chip stocks dipped to a 13-year low last week. The Public Debt Management Agency is scheduled to auction 1.5 billion euros of six-month treasury bills in the government’s first entry into the short-term debt market for the year. With Greece’s 10-year yield spread over German bunds close to peak levels – around 988 basis points – investors appear to be waiting for more evidence that the country’s fiscal reform plan is on track before demanding a lower interest rate to hold Greek debt. Investors will be keeping an eye out tomorrow for any increase in T-bill yields, indicating a higher perceived risk of a Greek default. Banks are more sensitive to debt auction results due to their high exposure to Greek government debt and could be headed for a more volatile week. Banks, which lost more than 4 percent last week, helped drag the FTSE/ATHEX 20 blue chip index to 630 points midweek, a 13-year low, before it rebounded on Friday to 647 points. Among the recent winners is OTE telecom, which drew buyers preferring to increase exposure to a non-banking sector, according to brokers. Last week, the share added nearly 11 percent. On Friday, the Athens bourse’s benchmark general index ended at 1,390.84 points, up 1.23 percent.