(REpeats story published late on Wednesday)
* Polish 10-, 20-year bond sales get strong demand
* Inaugural Czech 15-year paper sees thin demand
* Rising budget deficits taking shine off longer papers
By Jason Hovet
PRAGUE, May 20 (Reuters) - Investors snapped up a Polish
10-year bond at tender on Wednesday, although demand at the sale
of new 15-year Czech paper thinned out to highlight the limits
buyers have for long-term Central European debt.
Rising demand for the hard-hit region's assets has helped
governments borrow more in past two months, giving a cushion
against swelling budgets deficits caused by a sharp economic
downturn in the region.
The Czechs and Poles have had well-bid auctions in that
time, while Hungary restarted regular auctions last month after
a nearly half-year pause.
But sales of longer-dated bonds have been a tougher task and
are not seen getting easier due to rising fiscal gaps, an
expected end to interest rate easing cycles and investors'
remaining apprehension to longer risk, analysts said.
"People are not looking to put money into long-term
investments right now," said Marcin Kopaczynski, financial
markets analyst at Raiffeisen in Vienna.
Poland sold 1.45 billion zlotys ($451.8 million) of 10-year
bonds due in 2019 on Wednesday along with 386 million zlotys of
20-year bonds due in 2029. It had planned to sell a total of
between 1.0 to 1.8 billion zlotys. []
In the Czech Republic, an inaugural auction of 5.7 percent
coupon paper due in 2024 <CZ1002547=> saw much lower demand than
previous sales of shorter-term papers, but dealers expected
upcoming shorter-date auctions to keep up interest.
Wednesday's auction sold 6 billion crowns ($306.7 million)
worth of the bond, with demand near 9 billion, slightly above
offer, at an average yield of 5.798 percent. []
"Demand was not that high but it was more or less to be
expected because it (the maturity) is not really interesting for
everyone," said fixed income trader Dalimil Vyskovsky of
Komercni Banka, adding the market impact was limited.
An auction last week for a 3-year floating rate bond sold
6.8 billion crowns, while demand was more than triple that.
SHORT VIEW
Falling orders for central Europe's cars and electronics
have slammed industry, raising joblessness and slashing
government revenue. The Czechs and Poles have cut interest rates
to historic lows, but easing cycles are close to an end.
The Czechs' public sector gap is likely to triple to 4.5
percent of gross domestic product, and could widen further next
year.
But dealers and analysts have said that the government has
covered most of its borrowing needs this year after having sold
more than 100 billion crowns worth of domestic bonds this year,
along with 1.5 billion euros in euro-denominated bonds.
Poland's government is for now sticking to an 18.2 billion
zloty deficit envisaged in the 2009 budget law, but is still
expected to revise that in June or July. Analysts reckon it may
be at least twice as big.
Hungary, which reached out for a $25 billion International
Monetary Fund lifeline last autumn, agreed a deal this week that
allows the deficit to reach 3.9 percent of GDP.
(Additional reporting by Dagmara Leszkowicz; Editing by Toby
Chopra)
