It just got a whole lot more expensive for Poland to live up to a goal of selling more longer-dated bonds after the shock credit-rating downgrade by Standard & Poor’s (S&P).
The yield on the eastern European country’s 10-year bonds jumped 22 basis points on Monday, the most since September 2014, after S&P knocked the country down by one level, taking investors by surprise since the debt carried a positive outlook.
The selloff in the longer-dated securities pushed their premium over two-year notes to the widest since at least 2002, according to data compiled by Bloomberg.
The jump in costs is casting doubt over how successful the government will be in lengthening the maturity of its outstanding local-currency debt as outlined in a three-year plan in the budget approved by Poland’s new leadership.
Investors are more hesitant to hold money in longer-dated bonds on concern that the ruling Law & Justice party’s policies may worsen the fiscal deficit over time and hurt the nation’s status as a haven.
“The Finance Ministry may have to give up its long-term goal to extend the debt maturity,” said Pawel Golebiewski, who helps manage an equivalent of US$643 million bonds at Warsaw-based mutual fund BPH TFI SA. “The spread between two-year and 10-year yields is close to record levels, so it’s most rational to shorten the maturity of new issuance.”
The Polish Ministry of Finance did not immediately respond to a request for comment.
While two-year yields rose, the increase was not as much as for 10-year rates as a government plan to tax bank assets boosts demand for shorter-maturity debt.
At an auction of 32-week Treasury bills on Monday, the ministry sold more debt than planned as demand surpassed supply by almost fivefold.
Since government securities are exempt from the new levies, they are becoming more appealing than the central bank notes lenders traditionally used to park short-term cash.
S&P cut Poland to “BBB+,” the third-lowest investment grade, citing a series of measures that “weaken the independence and effectiveness of key institutions.”
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last