The Ministry of Finance issued one-year maturity securities yesterday, the average return per issued securities being 10.22%, thus exceeding the 10% threshold for the first time over the last year and a half, since the regular issuing of such instruments started again.
For the mandatory private pension funds (pillar II), the high returns on the primary state securities market is good news, since more than half of these funds’ investments shall be made in state securities. For the other maturity periods, from 6 months to 5 years, the average returns on the primary market (according to the last issuances of the Ministry of Finance) remained at approximately 9.5%.
According to the data from the funds’ issuing prospects, over half of their net assets shall be invested in state securities, most likely on the local market. Their high returns create the basis for higher returns of the pension funds. By the end of 2008, the mandatory pension funds shall collect total net assets of about EUR 200 million, of which over EUR 100 million shall be invested in state securities.
The Ministry of Finance started again the regular issuing of state securities in January 2007, after a quite long absence from this market. The average returns went up from 7%-8% last year to 9%-10% this year, as the inflation increased, leading to an increase in the reference interest rate of the National Bank.
