Investor appetite for Treasury bonds decreased by more than 27 billion dirhams in mid-2022 – Hoy 24

The Center for Business Research reported that investor demand for Treasuries fell 16.1 percent from Dh169 billion to Dh141.8 billion at the end of the first half of 2022.

In its latest “Research Report – Fixed Income”, entitled “Towards the continuous rise in rates in 2022”, the Center highlighted that “after registering a decrease of 11.1 percent during the first half of 2021, the demand for bonds of the Treasury by investors was significantly reduced. Large by 16.1 percent at the end of the first half of 2022, rising from AED169 billion to AED141.8 billion during the same period.

The source added that investors’ appetite for Treasury bonds continues its downward trend that began in 2019 regardless of expectations of rate unification in the medium term.

Analyzing the distribution of investor demand during the first half of 2022, the center highlighted the interest in short- and medium-term maturities, which amounted to 82 percent compared to 76 percent during the first half of 2020. The size of long-term maturities remained the same. at weak levels at about 18 percent during the same period.

The center explained that the fall related to the demand for Treasury bonds and their orientation towards short and medium-term maturities is explained in particular by “the increase in the movement of cash in circulation, materialized in the worsening of the bank liquidity deficit in plus 15.8 percent, going from 68.5 billion dirhams during the first half of 2021 to 79.3 billion dirhams during the first half of 2022.

Banks and institutions represent an important part of the demand for Treasury bonds in the auction market.

It is also explained by the inflationary expectations of investors in Morocco, which reduce their appetite for Treasury bonds, especially in the long term. As a result, transferable value collective investment agencies’ bond assets under management shrank by 4.7 percent during the first half of 2022.