Developments in the Greek government bond markets - February 2004
Greek government bonds trading on the electronic secondary securities market (HDAT) had a positive performance in line with the rest of the Euro-zone bonds. Amongst the benchmark bonds, prices rose between 63 and 184 basis points. The 20-year benchmark bond (maturing on 22/10/2022) recorded the highest price gains closing at 112.66 (with a yield of 4.85%) on February 27 compared to 110.82 (4.99%) on January 30. The 10-year benchmark bond gained 154 bps closing at 101.85 (with a yield of 4.27%) at the end of February compared to 100.31 (4.46%) at the end of January. The average yield spread between the Greek and the German 10-year benchmark bonds was 22 bps in February from around 20 bps the previous month. Two new benchmarks were launched successfully during the month, the 3-year bond (EUR 1.8 billion) maturing on 21/6/2007 and the 5-year bond (EUR 5.0 billion issued through syndication) maturing on 20/4/2009.
Yields dropped considerably for all maturities and especially at the short end of the yield curve reflecting market expectations for lower interest rates in the near future. 3-year bond yields declined to 2.80% on February 27 from 3.01% at the issuance on February 4 while 20-year bond yields were at 4.85% at the end of February compared to 4.99% at the end of January.
Market turnover on HDAT was EUR 51.38 billion in February, increasing more than 9% with respect to February 2003 (when it was EUR 47.04 billion). As in January, investors? interest focused on medium to long-term maturity bonds (7 to 20-year bonds) that absorbed 66% of the overall volume. In addition, of the 9,093 orders executed in HDAT during February, 51.1% were ?sell? orders and 48.9% ?buy? orders. Amongst individual bonds traded on HDAT, the 10-year benchmark bond recorded the highest traded volume with EUR 13.65 billion, followed by the 10-year bond maturing on 20/5/2013 (the previous benchmark) with EUR 6.82 billion. The 10-year benchmark liquidity, as measured by the ratio of the monthly traded volume over the amount outstanding, was 273% in February.