The subscription rate for Congolese treasury issues is above the Cémac average, despite the economic climate. As of September 31, 2020, the treasury was able to raise FCFA 188.9 billion, against 61.5 billion in 2019, an increase of 207.1%.
During the consultation meeting between the Public Treasury and the specialists in treasury securities (SVT), made up of local banks, the financiers observed an increase in the public securities market in the Republic of Congo.
In the second quarter of this year, for example, Assimilable Treasury Bonds (OTAs) reached 81.2%, against 76.6% of the sub-regional average. Assimilable treasury bills (BTA) having recorded a strong increase of 200.8% in the first quarter, recovered to 114.8% in the second quarter, due to the health crisis.
According to Gatien Ondaye Obili, the head of the credit, capital market and bank control department at the central bank, the development of the Congolese financial market performance is linked to statutory reforms and the expansion of investment possibilities with a quality active.
The BTAs, he added, have the best subscription rates, exceeding 100%, above the average of Cémac (Economic and Monetary Community of Central Africa).
“Recourse to the market has become commonplace to the detriment of statutory advances. Likewise, the perception of government signing by local investors seems more favorable than the rating of international agencies. (…) The deterioration of the financial rating of international agencies does not seem to influence the appetite for Cémac sovereign securities. Perhaps SVTs have other elements of appreciation, “said Gatien Ondaye Obili.
The dynamics of the government securities market is due, in large part, to the deemed high rate of repayments of funds raised by the Congolese treasury, experts believe. As of September 30, 2020, the public treasury has reimbursed approximately 126.1 billion FCFA, including 122.1 billion BTA and 3.9 billion FCFA in OTA interest. These reimbursements are up 40.2% compared to the volumes achieved a year earlier, which were 90.6 billion FCFA.
The Congolese treasury mainly relies on the participation of SVTs to strengthen its market. The head of the securities department at the general directorate of the public treasury, Raymond Yoka Ikama, observes a drop in participation compared to last year, due to an increase in OTA issuance in connection with the crisis due to the Covid-19 pandemic.
“The same dynamic continued, in particular with UBA Congo, the main investor, followed by BGFI Congo, who are supporting the treasury for its medium-term needs. The amount is less than seven times what he had made in 2019 at the same time. We can say that the volume of subscriptions does not depend on the frequency of participation, because we may be less frequent in the market and present large amounts, “said Raymond Yoka Ikama.
Note that of the twenty banks in the SVT network, only fourteen are active, six of which have actively participated in auctions. Like the previous central bank speaker, the treasury is arguing for long-term subscriptions.
