IGCP: “Electoral result did not raise much concern” among investors

The new governing solution that resulted from last Sunday’s legislative elections does not worry investors, even though there is no agreement signed between the various parties. Cristina Casalinho, president of the Treasury and Public Debt Management Agency (IGCP), says that the proof of this is the interest rates on Portuguese debt below those of Spain.

The victory of the Socialist Party in the parliamentary elections resulted in a solution that will make agreements depending on the issues. Even without signed paper, the president of the Treasury sees no concern in investors.

“The elections took place a week ago and since then I have had few contacts with investors, but the contacts I have had do not express a great level of concern about the Portuguese political situation […] The configuration of the electoral result does not seem to me to have given rise to much concern”, said Cristina Casalinho.

“We have good evidence with the behaviour of Portuguese interest rates. What we see is that, with the Spanish elections approaching, there was a reversal of the risk premium of the two countries. Therefore, Portugal is trading with lower interest rates than Spain, which is a good indication of the perception that the markets and investors had regarding the electoral results. I think we can say that it was positive”, she underlined.

After having happened temporarily at the beginning of September, it was after the elections that the interest rates on Portuguese ten-year debt became lower than those of Spain with the same maturity. This Monday, the national bonds trade with a yield of 0.17% in the secondary market, while the Spanish pairs trade with a yield of 0.21%.