Personal treasury bonds offered in June were undersubscribed across all maturities except the five-year, breaking a sellout streak that had continued throughout the year. Analysts attribute the shift to a buoyant domestic stock market and the listing of SpaceX, which they say drew investment funds heavily into equities.
According to Mirae Asset Securities' (006800.KS) mobile trading system (MTS), the five-year maturity recorded a subscription ratio of 1.60-to-1 as of the closing date Monday, selling out completely. By contrast, the three-, 10-, and 20-year maturities all fell short. For the three-year maturity, the coupon bond and the compound bond posted ratios of 0.65-to-1 and 0.56-to-1, respectively. A coupon bond pays regular interest once a year during the holding period and returns the principal along with regular and additional interest at maturity. A compound bond pays interest calculated on a compound basis together with the principal in a lump sum at maturity. The 10-year maturity recorded a ratio of 0.63-to-1, while the 20-year maturity showed a ratio of 0.48-to-1.
The industry points to heightened investor interest in the stock market as the backdrop for this month's weak performance of personal treasury bonds. Some interpret the cooling interest in personal treasury bonds—relatively long-term products that require locking up money for three years or more—as a result of demand concentrating on exchange-traded funds (ETFs) that include SpaceX or on direct investment in SpaceX. The fact that the Middle East war has effectively moved toward an end, acting as a positive factor for the domestic stock market, is also cited. Analysts also suggest that the three-year maturity fell short entirely because, while its holding period is shorter than other products, its spread of 0% meant the "term advantage" did not come into play.
The total issuance of personal treasury bonds in June stands at 200 billion won. By bond type, the breakdown is 3 billion won for three-year coupon bonds, 7 billion won for three-year compound bonds, 60 billion won for the five-year, 100 billion won for the 10-year, and 30 billion won for the 20-year. The spreads on the June issues were set at 0% for the three-year, 0.1% for the five-year, 0.5% for the 10-year, and 0.8% for the 20-year.
