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Federal Public Debt Inventory totaled R $ 3,993 trillion in July

Public Accounts

Three 12-month cumulative average cost indicators reach lowest value in historical series

The National Treasury released on Wednesday (28/8) the Monthly Federal Public Debt (DPF) Report in July . The debt stock increased 0.38% in nominal terms, from R $ 3.978 trillion in June to R $ 3.993 trillion in July. 

The domestic Federal Public Securities Debt (DFPD) increased 0.52% from R $ 3,826 trillion to R $ 3,846 trillion. The increase was due to the positive appropriation of interest in the amount of R $ 25.75 billion - partially offset by the net redemption of R $ 5.71 billion.

In July, DFPD issuances reached R $ 69.44 billion, of which R $ 32 billion in fixed-rate securities; R $ 15.06 billion remunerated by price index; and R $ 22.36 billion in floating rate securities. Of this total, R $ 66.58 billion were issued in traditional auctions; R $ 2.66 billion in exchange auction; R $ 2.68 billion related to sales of Treasury Direct Program securities; and R $ 210 million related to direct emissions.

Average FPD cumulative 12-month and 12-month FPDD inventory costs - in July, respectively, 8.66% per year and 8.79% per year - both reached the lowest value in the entire series. since December 2005.

The average cost of 12-month cumulative DPMFi public offerings, which stood at 7.11% pa in July, is also the lowest in the entire historical series - in this case since December 2010.

Regarding the Federal External Public Debt (EFPD) stock, there was a reduction of 3.19% over the stock verified in June, closing the month of July at R $ 146.85 billion, of which R $ 133.88 billion refer to debt. R $ 12.97 billion in contractual debt.

Optimism in July
July was very positive for emerging markets, mainly due to accommodative monetary policies (interest rate cuts) in the European and US markets.

Also contributing to the fall in interest rates in July in the domestic market was the approval of the New Social Security in the first round in the House of Representatives - according to the National Treasury analysis presented by the general coordinator of Debt Operations, Luis Felipe Vital; the general coordinator of Debt Control and Payment, Márcia Tapajós; and the coordinator of Public Debt Strategic Planning, Lena Oliveira de Carvalho.

Holders
The Social Security stock increased in the month, from R $ 914.86 billion to R $ 998.89 billion, between June and July. As a result, the relative share of the group increased to 25.97%, making Previdência occupy the position of main DPF holder.

Financial Institutions reduced inventory by R $ 12.59 billion, reaching R $ 873.99 billion in the month. Thus, the relative share went from 23.17% to 22.72%.

Investment Funds also reduced the stock, from R $ 1,027.39 billion to R $ 972.83 billion in the same period, becoming the second largest holder.

Non-residents, on the other hand, recorded a positive inventory variation of R $ 1.37 billion. The increase, however, did not follow the general evolution of FPD inventory and the group's share was stable at 12.3% (from 12.34% to 12.31% in July). In the accumulated of 2019, between January and July, the Non Resident stock increased by R $ 55 billion.

Finally, the Government group had a relative (also stable) share of 4.09% in July and the Insurers' inventory ended the month at R $ 153.06 billion.

Direct Treasury Direct Treasury
issues in July reached R $ 2.657 billion, while redemptions corresponded to R $ 2.216 billion, resulting in a net issuance of R $ 440.75 million. The most demanded security by investors was the Selic Treasury, which accounted for 49.46% of the amount sold.

Treasury Direct stock reached R $ 57.812 billion, an increase of 1.53% over the previous month. The most represented security in the stock is the IPCA + Treasury, which corresponds to 35.33% of the total.

Regarding the number of investors, 36,373 out of the 227,680 registered in Treasury Direct in July performed some purchase and / or sale of securities in the month of accession (active investors).

Currently, the total number of registered investors is 4.58 million and active investors 1.11 million. In the last 12 months alone (between August 2018 and July 2019), the number of registered and active investors increased by 91% and 74.4%, respectively. According to the general coordinator Luis Felipe Vital, "these numbers mean that Treasury Direct continues to grow vigorously."

"The democratic character and the effective 'pulverization' of the program (Treasury Direct) can be perceived by the value of the operations," said Vital, referring to the purchase of TD securities in amounts not exceeding R $ 5,000, corresponding to 86% of total acquisitions.

Market in August
The fall in risk perception for emerging countries (except Mexico) in July translated to an increase in the same index in August. Impact on the emerging market was the new tensions of the US-US trade war and, internally, the leap in risk perception towards Argentina, influenced by electoral uncertainties.

In August, in some countries (not Brazil), the effect of the 'inverted' interest curve was observed, which occurs when long-term interest rates are lower than shorter-term interest rates. . According to some economic approaches, the 'reversal' of the yield curve points to the possibility of recession in the future.

At the domestic level, according to the Treasury, the legislative advances of New Social Security were insufficient to convert the influence of global and emerging markets on Brazil. As a result, without ending the month, there is a slight increase in local interest rates in August. 

Federal Public Debt reports, tables and presentations are available at http://www.tesouro.fazenda.gov.br/en/relatorio-mensal-da-divida