For the first time in history, Spanish households have become the largest holder of Treasury Bills and have ousted foreign investors from first position. According to data published by the Bank of Spain, Until August, families held almost 29% of the total amount of Letters in circulation, for a value of 20,348 million euros. And this is more than what the institutions (mostly) in the rest of the world had in their hands, which have been the great supporter of the Spanish public debt since the 2011 crisis. You have to go back to then, more than twelve years ago, to find a percentage of less than 30% of Letters in the hands of non-residents as happens today. The value of Spanish shorter-term debt has fallen below the barrier of 20,000 million euros in favor of households, which, by the way, have preference in auctions when allocating the securities and this explains, partially, that they are taking over the requests in each of the four auctions that are held each month (in letters at 3,6, 9 and 12 months).
“The investor is only looking for the coupon, it is the only thing he is asking for right now,” comments one of the heads of asset management at a Spanish insurance company, and that is why the holding of bills has skyrocketed compared to the other most common financial asset. in the hands of households such as the shares of the Spanish stock market. At the end of summer, individuals had 87,471 million euros of shares in the large listed companies on the national stock market, this is 15.3% of the market capitalizationwhich slightly exceeded 570,000 million euros at the end of August. The weight of families in the most liquid market, such as equities, is half that which they represent in the volume of Treasury Bills in circulation.
It must be taken into account that the value of households’ participation in the national stock market has increased more than 11% in the year, but this is lower than the upward trajectory of the Ibex until August, which at that time accumulated a rise of 13.5 %. Today that same revaluation is at 7%. What does this imply? Simply that The weight of individuals in the market decreases since the Spanish investor, conservative by nature, has started to buy debt after a decade in which fixed income has no alternative. In fact, according to data compiled by Spanish Stock Exchanges and Markets (BME), shares in the hands of foreign investors exceeded the 50% barrier for the first time in history, and this is a historical maximum. Never before had half of the valuation of the Spanish stock market been in foreign hands. “Retail investors controlled 16.2% of Spanish shares, almost one percentage point less than last year and the second lowest figure in the historical series,” noted the manager of the national stock exchange.
The financial crisis of 2008 marked a before and after for Spanish debt. Until then, it was the banks and national entities that were loaded with government bills and bonds, more than half of which were in their portfolios. But Lehman Brothers fell and everything changed. The same year as the outbreak of subprime National banks, at the center of concern, released debt and foreign investors stepped forward. For the first time, non-residents exceeded 20% of the total volume issued in shorter-term debt. A year later, in 2009, that percentage exceeded 50% and reached a high of 77% in 2017. Hence, its fall now below the 30% threshold is more than significant.
Meanwhile, the interest of Spanish households does not cease. The lack of supply among the deposits of large entities, which are launching to market fixed income, guaranteed and target return funds as an alternative, has meant the push definitive so that families see Treasury Bills as the main way to make their savings profitable. In July 2022, the month in which the European Central Bank (ECB) carried out the first increase in interest rates in a decade, individuals had 25 million euros in bills in their hands, 0.03% of the total issued by the public body. Thirteen months later they have multiplied this amount by 813 times and have become the first holder for the first time in history.