Turkish bond yields rose after debt auctions

Mon Mar 18, 2013 1:06pm EDT

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(Updates prices)
    ISTANBUL, March 18 (Reuters) - Turkish bond yields rose on
Monday after treasury debt auctions on Tuesday attracted
lower-priced bids than expected. 
    The Treasury tapped a five year fixed-coupon bond, maturing
on Feb 14, 2018, at a yield of 6.54 percent in an auction, above
a Reuters poll forecast of 6.45 percent.
    It also sold a seven-year floating rate note, maturing on
March 11, 2020, at a price of 98.210 lira in a new issue, below
a Reuters forecast of 98.550 lira. 
    On Tuesday the treasury will issue a 10-year fixed-coupon
bond and tap its two-year fixed-coupon bond.
    "Demand for the 7-year floating rate note was higher
compared to the 5-year maturity fixed coupon note, as we
expected. Average compound yield on 5-yr note realised 24 basis
points higher compared to February's auction where yields came
at 6.30 percent compound," said Is Investment strategists in a
note.
    Uncertainties regarding the policy stances of the world's
largest central banks raises demand for floating rate notes to
help manage duration, analysts said.
    "Benchmark bond yields rose above 6 percent after auctions
... If there isn't demand for the new 10-year bond at tomorrow's
auction, we may see a further increase in benchmark bond
yields," said a bond trader at a bank.
    By 1559 GMT, the yield on the two-year benchmark bond
 was at 5.99 percent, rising from Friday's close
of 5.95 percent. 
    The auctions will enable the treasury to reach its borrowing
target for March, analysts said.
    Turkish assets were also under pressure with emerging peers
as a levy on bank deposits in Cyprus threatened to deepen the
euro area's debt crisis.
    The lira stood at 1.8110 to the dollar, from
1.8064 late on Friday. Against its euro-dollar basket
 it firmed to 2.0789, from 2.0837.    
    Istanbul's main share index rose 0.32 percent to
83,378.82 points, outperforming a fall of 1.17 percent in the
global emerging markets index. 

 (Writing by Seda Sezer; Editing by Ruth Pitchford)
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