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Fewer papers expire this year than last
ÁKK presented its financing plan for this year last December, which included, among other things, the gross and net issuance of retail government securities. According to the calculations of the ÁKK then this year, HUF 2.355 billion of retail government securities are expected to matureThus, calculated with a gross production of 3,355 billion, this year, like the previous year, it is expected that
The net stock of government securities held by households may increase by HUF 1 billion.
Based on available data, we analyze which retail government securities have the longest maturity this year. In 2021
- two years old
- one year and
- there will be maturities in premium government securities.
Of these, the two-year Hungarian government securities will amount to approximately HUF 60 billion (thus the paper that is no longer traded will practically disappear from the market entirely), but Longer maturities can be expected on premium Hungarian government securities. According to stock market data at the end of November last year (this is the last one at present), PMÁP’s maturities will be higher in May, August and October of this year, for an approximate value of HUF 563,000 million.
The one-year maturities of Hungarian government securities are generally similar on a monthly basis, and weekly subscriptions and maturities are practically extinct.
Adding the numbers in the figure above, you can notice that the amount is less than the 2355 billion included in ÁKK’s financing plan. The difference is due to the fact that we learned from ÁKK that the above figures have yet to be added
- the one-year RTD stock of about 220 billion HUF,
- In addition, the ÁKK planned a monthly repayment of HUF 30 billion (HUF 360 billion / year), in addition to
- 1MÁP and KTJ one-year sales planned for December, which will expire in 2021 (85 billion HUF),
- In addition to building on experience, ÁKK planned to buy back approximately HUF 50 billion from the two-year KTJ in 2021.
The retail rebates calculated by ÁKK also include rebates of higher government securities, but the data so far shows that this is a negligible value. Roughly, monthly rebates in super-government securities can be deducted from a chart published in a previous MNB article. Based on this, until July of last year, apart from the biggest repayment in March, there were repayments between HUF 10-40 billion monthly:
What will a billion trillion expansion do here?
In the financing plan, ÁKK emphasized that the increase of HUF 1 billion is only a conservative estimate for 2021, as last year there was almost the same increase, if we look only at retail investors. We have previously written that there were significant maturities in institutional government securities held by institutions last year, according to the chart below, this meant a decrease of HUF 972 billion, leaving only HUF 339 billion in retail securities held by institutions at the end of December.
The question, of course, is where these additional billions of forints will enter the system. It can be stated with almost total certainty that the most sought after paper this year will be MÁP +, is practically the only construction that was able to show a substantial increase in assets last year.
Last year, despite the coronavirus crisis, the demand for paper was maintained, with Hungarians buying more than 2 billion HUF of MÁP + in 2020 as part of the quotations.
Although inventory data for December are not yet available, By the end of November, the printed and dematerialized version of the super government security had accumulated a total of more than 5.11 billion HUF in assets.At the end of December 2019, it was still less than HUF 3.2 billion.
The inflation tracker is worth mentioning. About Hungarian Government Premium Securities which, since last September, has been able to show a monthly increase in assets of more than 40 billion, regardless of the large institutional maturities.
Demand for the paper is likely to return this year as many expect inflation to rise significantly in Hungary. According to analysts interviewed by Portfolio Along with the long-awaited recovery, price increases may accelerate by 2021, according to analysts, inflation will be around 3.5% by the end of this year.
If we believe the forecast above, it may be worth keeping some of the savings in inflation-controlled government securities. As we have written several times, if inflation is above 3.55% on average per year, it may be worth buying the 5-year PMÁP instead of the MÁP +.
Considering that the undisclosed objective of the debt manager is to encourage the purchase of longer-term retail government securities, The question is what will happen to the pension bonus that has been changed several times, whose introduction was postponed due to the great success of MÁP + and the outbreak of the coronavirus. However, ÁKK has already said that construction details have been worked out, so this year the palette can be expanded with a new retail paper.
Another interesting addition is that last year the head of ÁKK, Zoltán Kurali, presented the financing plan and stated that the debt manager estimates that 30-40% of annual household savings can be used for retail government securities, therefore that this year’s net sales of 1 trillion are considered conservative. .
According to data released by the MNB, the gross financial assets of Hungarian households increased to HUF 63.804 billion in the third quarter of last year (full annual data not yet available), which is 5.3% higher than at the end of 2019. Liabilities decreased (mainly bank loans), that is, net financial assets increased by a similar amount, 4.9%. If we take the net growth, that means about $ 2.45 billion in fresh savings in 9 months, so if we take 30-40% of that, we are really getting about a billion billion in retail government securities last year. .
Thus, ÁKK calculates that household net savings may increase at least this year.
Cover image: Shutterstock
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