More active secondary market in Philippines seen
Government pump-priming and increased issuance of debt paper are seen to result in a more active secondary market in the next few months following slowdown in the second quarter.
According to a joint research by First Metro Investment Corp. and the University of Asia and the Pacific, the months following June should show better results, as the anticipated rise in spending and borrowing would increase the supply of tradable debt paper.
Debt instruments trading slowed down in the second quarter with year-to-date average weekly volume easing to P50.6 billion from P58.1 billion a year ago, the research paper noted.
While April trading showed an average growth of 55 percent, “May was dismal with an average decline of 23.6 percent,” it added. “With rates at historical lows, traders opted to hold bonds to maturity.”
FMIC and UA&P also observed that the first two weeks of June showed better trading with growths of 8.8 percent and 140.4 percent, respectively, but a decline of 79.1 percent the following week.
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