BTp, foreign investors buy 26.7 billion more in the first two months

Foreign investors continue to increase their purchases of Italian government bonds. After the positive net balance of 51 billion over the entire year 2023 (which Il Sole 24 Ore reported on 27 March), the trend continued and even accelerated in the first two months of the year. According to the latest data released yesterday by Bankitalia as part of the monthly balance of payments statistics, in February net purchases of Italian public securities from abroad exceeded 22 billion euro. Considering that in January the net balance had been 4.7 billion, in the first two months of 2024 foreign investors increased the stock of Italian debt by 26.7 billion. A level that is already more than 50 per cent of the increase recorded the previous year.

The jump in foreign purchases of BTp bonds in February was commented on positively by analysts at US bank Citigroup, who pointed out that 'net inflows over the past twelve months increased to EUR 63 billion, the highest level since 2019'. The risk-return ratio offered by BTp bonds, which on the ten-year maturity offered around 3.9% yesterday, is evidently attractive to foreign investors. And their increased purchases are certainly good news for the Italian state. The problem is that the stock of public debt continues to increase and that, despite the sprint of purchases coming from outside Italy, the percentage share in the hands of foreign investors - according to Citigroup's calculations - remains firm at 20% of the total. A level well below the 45% of 2009 or the 30% of 2015.

The fact remains that the increase in the stock of Italian sovereign bonds, which, according to Citi, rose from 420 billion to 500 billion in little more than a year, helped to buffer the ECB's lack of purchases after the end of the Qe and the temporary contraction of securities in the hands of Italian financial institutions. The surplus of purchases, as repeatedly documented by Il Sole 24 Ore, came from Italian retail savers who participated en masse in the issues of BTp Valore and BTp Italia.

The growth of Italy's public debt - which rose in absolute terms in February to a new record of EUR 2,872.4 billion - is not a source of concern for investors at this stage of the market. Nor should it be, according to financial analysts, for the three major rating agencies that are about to give their verdict on Italy's creditworthiness. They start today with S&P's pronouncement, followed by Fitch (3 May) and Moody's (31 May). 'We see limited risks of rating actions on Italy,' is Citi's forecast.