Erste says Romania’s gross funding needs for 2015 amount to RON 50 bln

Romania’s gross funding needs for 2015 amount to RON 50 bln, says Erste

Newsroom 02/10/2014 | 16:56

The country has gross funding needs of around RON 50 billion next ear, out of which 22-23 percent could be tapped from international markets and the rest from the domestically, according to report by Erste Group, which focuses on CEE countries.

Romania has already covered around 82 percent of its total funding needs this year, thanks to three outings in January and April, which accounted for 22 percent of this year’s funding target.

“They have also helped local yields remain, in general, on a downtrend up until now, as the Ministry of Finance borrowed less from the local market (the average yield on the primary market fell to 3.7 percent in the first eight months of 2014, from 4.7 percent in 2013),” said Erste analysts.

The report further says that local banks, investment and pension funds will be the main buyers of government notes in 2015, with an increase in net exposure of around RON 6 billion.

“Although a fledgling industry in Romania, private pension funds have in only a few years become one of the main investors in state bonds, accounting for more than 9 percent of the total market,” said the report.

Erste says that non-residents are now claiming more than 20 percent of the local bond market and sees rather limited growth in their exposure next year.

The report says that CEE sovereign bond market is the fifth largest in Europe, with a market capitalization of around EUR 400 billion, while Romania stands out as a regional champion among local currency bonds.