ALLIANZ-TIRIAC Private Pensions: Banks have no interest in trading T-bonds on BSE
Romania's mandatory private pension funds (2nd pillar) will continue to prefer the
primary market to buy T-bonds, at long as liquidity of those
instruments on the Bucharest Stock Exchange (BSE) stays really low,
says Dorin BOBOC, CIO at ALLIANZ-TIRIAC Private Pensions, the manager
of the second largest pension fund in Romania. "The banks have no real
interest in trading T-bonds on the BSE, although those instruments were
listed this month. The market liquidity for those bonds on the BSE will
stay low for quite a while, especially because the listing of state
securities at the BSE was done without any change in the OTC interbank
market for T-bonds", he says.
In his view, the primary market (new issues of T-bonds) is and will stay important to pension funds, because those funds will always have new cash - entering their pockets every month - to invest in state bonds. The manager of the second largest pension fund (with a market share of 26% in the growing mandatory pensions market) also said there are different arguments to consider when investing in state bonds on the primary or secondary market. On the primary market - new issues of T-bonds - the yields offered are bigger, while the secondary market offers a larger spread of supply.
