Congressional Representative David Trone, who represents Maryland's 6th district, has recently made several noteworthy financial transactions. In November 2023, Trone sold a portion of his Pepsico stocks valued between $50,001 and $100,000. Additionally, throughout 2023, Trone engaged in multiple purchases and sales of US Treasury Bills, with transaction values ranging from $250,001 to $5,000,000. Trone's transactions with US Treasury Bills due in January and February 2024 followed a similar pattern.
Pepsico, Inc., the company in which Trone sold off stocks, has been demonstrating robust financial health. It currently has a market capitalization of $251.74 billion and a P/E ratio of 27.27. The company has a consistent history of dividend growth and impressive gross profit margins. More information about Pepsico can be found on InvestingPro's website [244963b6].
The Philippine government made a full award of the Treasury bills it offered on Monday. The Bureau of the Treasury (BTr) raised P15 billion as planned from the T-bills it offered on Monday as total bids reached P52.947 billion, or over thrice the amount on the auction block. The BTr borrowed P5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P19.037 billion. The three-month paper was quoted at an average rate of 5.78%, 8.9 basis points (bps) lower than the 5.869% seen last week. The government likewise made a full P5-billion award of the 182-day securities, with bids reaching P16.31 billion. The average rate for the six-month T-bill stood at 5.93%, down by 5.8 bps from the 5.988% fetched last week. Lastly, the Treasury raised P5 billion as planned via the 364-day debt papers as demand for the tenor totaled P17.6 billion. The average rate of the one-year debt dropped by 2.5 bps to 6.056% from the 6.081% quoted last week. The awarded T-bill rates today went lower after the US economy posted fewer new non-farm jobs in April 2024 relative to market expectations. The softer US jobs data could support more rate cuts from the Fed this year. US job growth slowed more than expected in April and the increase in annual wages fell below 4% for the first time in nearly three years. Signs of labor market cooling raised optimism that the US central bank could after all engineer a “soft landing” for the economy and doused chatter of stagflation. Markets are now pricing in 45 bps of cuts this year, with a rate cut in November fully priced in. On Tuesday, the BTr will offer P30 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and eight months. The Treasury wants to raise P210 billion from the domestic market this month, or P60 billion from T-bills and P150 billion via T-bonds.
The decline in yields on Philippine government debt is attributed to softer US economic data and caution from the Federal Reserve on tightening monetary settings further. The US central bank has kept its benchmark interest rate steady, and US Treasury yields remain below the 5% milestone. The peso has gained strength against the dollar, and local yields are expected to continue their downward path. The Bangko Sentral ng Pilipinas (BSP) may remain relatively more hawkish than the US Federal Reserve due to the divergence in inflation paths. The BSP has kept its policy rate unchanged at 6.5% amid an improving inflation outlook. Philippine headline inflation fell to a three-month low of 4.9% in October.
The rates of Treasury bills and bonds on offer this week in the Philippines could track secondary market levels. T-bill yields could rise while the reissued 10-year T-bonds could decline. The government plans to auction off P10 billion in Treasury bills and P20 billion in reissued 10-year Treasury bonds. The rates of the 91-, 182-, and 364-day T-bills decreased, while the yield on the 10-year bond went down. Oil prices settled lower for a second consecutive day, and US Federal Reserve Chair Jerome H. Powell stated that the risks of slowing the economy too much are balanced with those of not moving interest rates high enough to control inflation.
The Philippine central bank's term deposit yields rose at an auction on Wednesday as central banks around the world remained hawkish despite easing inflation. Demand for the Bangko Sentral ng Pilipinas' (BSP) term deposit facility (TDF) increased to P339.7 billion from P310 billion on the auction block. Tenders for the one-week term deposits hit P170.523 billion, above the P160-billion offer. Banks asked for yields ranging from 6.56% to 6.612%. The 14-day deposits attracted P169.153 billion in bids, higher than the P150 billion being sold by the central bank. TDF yields increased after US Federal Reserve Chairman Jerome H. Powell said a rate cut is unlikely in March. TDF yields also rose after the BSP said it intends to keep its policy settings 'sufficiently' tight until there is a sustained decline in inflation. Inflation slowed to 2.8% in January from 3.9% in December and 8.7% a year ago. The government is looking at raising at least P30 billion from its first retail Treasury bond sale this year on Feb. 13.
Yields on government securities (GS) traded in the secondary market rose by 12.79 basis points (bps) on average week on week. Yields on the 91- and 182-day Treasury bills (T-bills) rose by 9.36 bps and 8.35 bps to 5.8663% and 5.9804%, respectively. The 364-day T-bills fell by 1.7 bps to yield 6.0344%. Yields on the two-, three-, and four-year Treasury bonds (T-bonds) rose by 23.81 bps (to 6.4167%), 25.04 bps (6.5376%), 21.51 bps (6.6133%), respectively. The rates of the five- and seven-year T-bonds went up by 17.41 bps to fetch 6.6701% and 15.91 bps to 6.7786%, respectively. The 10- and 25-year debt papers saw their rates rise by 21.24 bps (to 6.8924%), and 0.10 bp (6.8006%), respectively, while the 20-year debt paper inched down by 0.31 bp (6.799%). GS volume traded rose to P14.66 billion on Friday from P14.23 billion a week earlier. GS yields moved higher after Fed Chair Jerome H. Powell reaffirmed their cautious policy stance. The surge in US Treasury yields influenced the local bond market. The rejection of bids during last week's 15-year bond auction fueled a selloff in local bonds. Top US central bank officials including Mr. Powell backed away on Tuesday from providing any guidance on when interest rates may be cut. Fed policy makers have said since the start of the year that rate cuts are contingent on gaining 'greater confidence' that inflation is moving towards the central bank's 2% goal. The Chinese economy grew faster than expected in the first quarter. The overall market sentiment was bearish, indicating a lack of positive catalysts both locally and globally. For this week, GS yields are expected to continue their upward trend due to potentially strong US data on GDP and personal consumption expenditures price index.
Meanwhile, Greece's Public Debt Management Agency (PDMA) plans a 52-week treasury bills auction to raise 625 million euros. The auction is set to mature on March 7, 2025, and aims to enhance national finances and economic stability. The move aligns with the U.S. Department of the Treasury's principles of financing government expenditures efficiently. The success of the auction could have implications for Greece's economic recovery and investor confidence. It highlights the importance of innovative financial mechanisms and Greece's potential for growth amidst adversity.