National bonds will now be easier to sell

Hundreds of thousands of citizens who have invested in state ‘national’ bonds will now have the option to sell these securities on the stock exchange before maturity, without having to accept a significant loss. On the Zagreb Stock Exchange on Monday, contracts were signed for the market maker services for state bonds marked H277N and H253B, as well as treasury bills marked T547N. The market maker will be Raiffeisen Bank. It is worth noting that the label H253B hides the first national bond issued in March last year, while H277N is of a more recent date, from July this year. The treasury bill T547N is the latest record, issued last week.

The contracts were signed by the Minister of Finance and Deputy Prime Minister Marko Primorac, the Director of the Public Debt Management Office of the Ministry of Finance Hrvoje Radovanić, the President of the Management Board of the Zagreb Stock Exchange Ivana Gažić, and on behalf of Raiffeisenbank Austria Ante Odak, a member of the Management Board, and Tomislav Ružić, Executive Director of Financial Markets. This agreement should significantly increase the liquidity of these state securities owned by citizens. Namely, the services of market makers are obliged to provide continuous supply and demand for securities, positively affecting their availability and liquidity, which can be crucial for investor interest.

– This is the first time we are introducing a market maker mechanism for bonds and treasury bills, setting a new standard in public debt management. We welcome this step towards increasing the liquidity and accessibility of these instruments to a wider range of investors – said Ivana Gažić. Ante Odak emphasized that he believes this cooperation with the Ministry of Finance is very important as it primarily represents an additional step in the state’s responsibility to consider price stability in the secondary market when issuing bonds – I am particularly pleased that Raiffeisen Bank has been recognized as a leader in the capital market that will continue to care for that price stability – said Ante Odak.

Currently, as much as 10 percent of the national debt is owned by citizens, and the state does not hide its ambitions to issue national bonds and treasury bills in the coming years. However, most investors among citizens hold these securities until maturity and are not inclined to sell them early on the stock exchange. As a result, liquidity is very low. For example, the bond H253B recorded 23 transactions with a turnover of 892 thousand euros during November. With the bond H277N, along with three OTC transactions, only seven transactions were recorded on the regular market since its listing.