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Analysis of Fixed Income Trends: Favorable Financing Conditions at Year-End

Analysis of Fixed Income Trends: Favorable Financing Conditions at Year-End
Monday 11 December 2023 - 16:20 By: Dakir Madiha
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According to Attijari Global Research's (AGR) "Weekly Hebdo Taux – Fixed Income" report covering December 1st to 7th, the obligatory market stands out due to favorable financing conditions in the late part of the year. AGR notes, "Since the beginning of the last quarter and in line with the easing of inflationary pressures, bond rates continue their downward trend, primarily driven by the Treasury's surplus cash position combined with a resurgence of investor appetite for BDT, especially towards MLT maturities." Consequently, the Treasury was practically absent from the market during the second auction session in December, offering only a modest amount of 100 million DH, entirely allocated to a two-year maturity.

Conversely, after two years, the two-year rate decreased by two basis points (PBS) to stabilize at 3.32 percent. The demand for BDT was limited to 1.2 billion DH, aligning with the monthly funding requirement announcement approximating 7.3 billion DH for December. Indeed, the Treasury's monthly funding requirement realization rate exceeded 95% during this auction session, leaving a small remainder of approximately 320 million DH for the month of December.

Due to these conditions, AGR maintains its optimism regarding the progress towards the consolidation of rates by the conclusion of 2023.

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