T-Bills yields jump to 3.99% – Big drop in demand from institutional investors? Much better buy than Fixed Deposits now (6 July 2023 Auction Results)



Investors waiting for T-Bills results today would have noticed the delay (with no results out even at 330pm).

It even got to the point where MAS released a statement that:

“Due to the high volume of applications, please expect a slight delay in the publication of the auction results for BS23113V. We regret any inconvenience caused.”

When the T-Bills auction results actually came out though, they were pretty surprising.

Yields jumped to 3.99% (from 3.89%) the previous round.

And yet demand only went up slightly from $9.9 billion the previous auction, to $10.3 billion this time around.

That’s only a 4% increase in application amount.

This suggests that perhaps the nature of the applications has changed – from a few big institutional investors, to many small retail investors.

That drove a big increase in application volume, without a big increase in application amount.

This is a very interesting result, and worth discussing.

Auction: BS23113V 6-Month T-bill Auction Results

You can see the cut-off yield for the 6 July T-Bills auction below, jumping to 3.99%.

Plotted in graph form below, you can see how the T-Bill yields has firmly broken out of the range it was in since March 2023.

Whether we will return to the December 2022 highs (4.4%) remains to be seen, but this result is definitely a very interesting insight into where liquidity is moving.

In my weekend article I estimated a range of 3.85% – 3.95%

So this result (3.99%) is definitely on the high side of what I was expecting.

Demand for T-Bills is only up slightly

Application amount is only up slightly to $10.3 billion (vs $9.9 billion the previous auction).

You can see this in graph form below.

Yes, demand is up, but it’s only ticked up slightly.

And yet MAS says that there is a “high volume of applications”.

What gives?

I suppose the most plausible reason is that the make up of the applications has changed.

Instead of a few big institutional investors applying for large amounts.

You now have a lot of small retail investors each applying for small amounts.

So application volume goes up, but application amount doesn’t go up that much?

This suggests a big underlying shift in the type of investors applying for T-Bills – from insitutional into retail.

And somewhat in line with the trend we saw in the previous T-Bills auction, with declining application amounts.

Which is very interesting though, because if indeed institutional investors are moving their funds elsewhere, we might see a further march up in T-Bills rates going forward.

How do you know if you have been allotted T-Bills?

There are quite a lot of questions on how do you know if you have been allotted T-Bills.

The easiest way is to check if you have any refund from your bank tonight.

Some banks like OCBC will also issue you a confirmation note (but DBS doesn’t).

Otherwise, I break down the different scenarios below.

If you applied Non-Competitive Bid, you will get 96% allotment of whatever you applied for.

Ie. If you applied $100,000, you get $96,000 worth of T-Bills allotted.

If you applied Competitive Bid, then:

Full allotment if you applied below 3.99%

2% allotment if you applied 3.99%

No allotment if you applied 4.00% and above.

I myself applied for the T-Bills – Much better buy than Fixed Deposits now

I actually redeemed some of my Singapore Savings Bonds last month with a view to rotating them into T-Bills.

I parked some cash in UOB Stash Account for instant liquidity, which meant I don’t need as much Singapore Savings Bonds anymore.

This seems to have paid off, because with these T-Bills they are paying out easily 100bps above my existing Singapore Savings Bonds.

As a reminder, the best fixed deposits only pay 3.55%, so if this keeps up, we’ll see more of the dynamic we saw last year where bank funds are drawn on to move into T-Bills.

This has definitely been an interesting result though, because it indicates T-Bills yields may continue to march upwards in the months ahead.

Let’s see!


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  1. HI, if you compare the statistics of the 2 previous t-bill auction results in June 2023, you will notice that both median yield and the average yield have been declining even though the cut off yields have been climbing. So i agree that the level of retail participation may be rising.

  2. I am actually surprised to see that treasury bills yield only starts moving up now. MAS bills which are only available to institutional invetors already move above 4% in late May. The gap between MAS bills and treasury bills is simply too wide and this likely pull treasury bills yield up eventually.


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