retail debt program tesouro direto - esaf · retail debt program – tesouro direto david athayde...
TRANSCRIPT
2
Guidelines
» Launched in 2002, as a partnership between the Treasury and BM&FBovespa (stock
exchange)
» Treasury: in charge of bond offering and pricing
» BM&Fbovespa: responsible for the electronic system that supports the negotiations
through Tesouro Direto
» Objectives (from the Treasury point of view):
» To offer another savings product alternative
» To increase the investors base
» Didactic purposes – transparency and financial education
Main Features
3
Characteristics
» Interned Based
» Individuals need one agent (bank or broker) to link them into the system, but the decision over the
portfolio composition is theirs.
» Minimum/Maximum amount per operation:
» Min: Regular Purchases: 10% of a bond unit => around US$ 35 / Programmed : around US$ 15
» Max: US$ 500,000
» Offers regular government securities through the internet
» Uses roughly the same on-the-run instruments for debt roll-over
» One exception tailored for retailers: Zero-coupon inflation-linked bonds
Main Features
4
Characteristics
» Consulting the system
» The system can be accessed for consulting purposes 24 hours a day, 7 days a week
» Buying Bonds
» It is possible to buy Bonds on weekdays, weekends and holidays
» Except from 5am to 9am on weekdays – system maintenance
» Selling Bonds to the Brazilian Treasury
» The selling of Bonds to the Brazilian Treasury can be done every Wednesday – at market prices
» Weekly liquidity
Main Features
5
Competitive Costs
» Financial Institution Fee (vary a lot, some have zero fee) – from 0 to 1%per year.
» Custody Fee (BM&FBovespa – Brazilian Stock Exchange) – 0.3% per year.
» Investment Funds usually have higher fees, which are inversely proportional to the volume
available for investment (low-income investors pay more)
» As the investor is responsible for his portfolio allocation, there are no costs related to the asset
manager role.
Advantages
7
Flexibility – Customized Portfolio
» Maturities range from 2 to 40 years
» Three types of bonds: fixed rate / inflation-linked / floating rate
» Two available flows:
» LTN, LFT and NTN-B Principal: the principal and interests are paid only when the bond is
redeemed;
» NTN-B and NTN-F: there are also semi-annual coupon payments.
Advantages
8
Available Prices and Rates
List of Bonds Offered
Security Maturity Rate(p.y.) Unitary Price
ASK BID ASK BID
Inflation (CPI) Linked
NTNB Principal 150519
15/05/2019 3,74% - R$ 1.812,02 -
NTNB 150820 15/08/2020 3,78% - R$ 2.598,45 -
NTNB Principal 150824
15/08/2024 4,09% - R$ 1.438,68 -
NTNB 150535 15/05/2035 4,23% - R$ 2.882,62 -
NTNB Principal 150535
15/05/2035 4,35% - R$ 886,35 -
NTNB 150850 15/08/2050 4,40% - R$ 2.939,24 -
Fixed Rate
LTN 010116 01/01/2016 9,12% - R$ 784,98 -
LTN 010117 01/01/2017 9,43% - R$ 711,97 -
NTNF 010123 01/01/2023 9,79% - R$ 1.036,38 -
Floating Rate (Selic)
LFT 070317 07/03/2017 -0,03% - R$ 5.541,15 -
As of: 25-Apr-2013 14:20:56
10
Clearing Process
» After the purchase is confirmed, a protocol number and the payment due date are displayed.
» The financial resources should be made available to the Custodian on the week day that
follows the purchase date.
» The investor is responsible for :
» Contacting the Custodian to obtain its banking details
» Transferring the money to the appropriate account
Purchase Procedure
11
Competitive Returns
» Public bonds usually are the safest financial investment in a country
» Once purchased, the bond is registered as a property of the investor
» If the financial institution goes bankrupt, the investor just have to transfer his bonds to
another institution.
Advantages
Safety
» Lower Costs
» Considering the declining trend of interest rates in Brazil, investors can guarantee an high yield
bond for a long period.
12
IOF and Withholding
» The securities offered at Tesouro Direto are subject to the same taxes of any fixed Income
investments:
» The regressive IOF tax (for investments below 30 days)
» Withholding tax :
» 22.5% up to 180 days;
» 20.0% from 181 to 360 days;
» 17.5% from 361 to 720 days;
» 15.0% above 720 days.
» The withholding tax is only charged at the moment of selling, previous redemption and when
the bond have coupon payments – semi-annually.
Taxation
13
BM&FBovespa and the Financial Institution
» BM&FBOVESPA charges 0.30% per year over the total value of the stock
» Each financial institution has a different fee:
» This fee is freely agreed with the investor
» Induce market competition
Fees
14
Improvements
» Home-Broker integration
» Investor can operate through his financial institution’s web site
» Cost Reduction
» There was also a negotiation fee that was abolished
» “Scheduled Sales”
» Periodical purchase and sales programming
» Re-investment
» Incentive to retailers
» Fee draw-backs conditional on performance
Recent Developments
15
# of Operations by Financial Volume – Mar 13
Recent Numbers
31.8%
12.5%
7.7%
5.0% 4.4%
12.5%
19.6%
3.7%2.6%
0.2%
Up to 1
k
1 to 2
k
2 to 3
k
3 to 4
k
4 to 5
k
5 to 1
0 k
10 to 5
0 k
50 to 1
00
k
100 t
o
500 k
500 k
a 1
M
Sales by Maturity – Mar 13
1-5 years
28,4%
5-10 years
25,4%
> 10years
46,2%
16
Outstanding – Mar 13
Recent Numbers
Fixed 23.8%
Inflation 67.4%
Selic 8.8%
Total = R$ 9.5 bn / US$ 4.8 bn
17
Return – Feb 13
Recent Numbers
Bond Maturity
In February In the Year In 12 Months
LTN 1/1/2016 0.28% -0.30% 14.78%
LTN 1/1/2017 -0.06% - -
NTN-F 1/1/2023 -1.48% -1.56% -
NTN-B 8/15/2020 0.33% -1.01% 18.94%
NTN-B 5/15/2035 -3.00% -2.01% 23.73%
NTN-B 8/15/2050 -6.01% -5.68% -
NTN-B Principal 5/15/2019 0.15% - -
NTN-B Principal 8/15/2024 -1.02% -2.27% 25.10%
NTN-B Principal 5/15/2035 -6.25% -2.61% 32.78%
LFT 3/7/2017 0.43% 1.57% 7.39%
Gross Return
18
Enrolled Investors
Recent Numbers
4,496 4,042
287,273
342,092
2,000
4,000
6,000
8,000
10,000
12,000
230,000
250,000
270,000
290,000
310,000
330,000
350,000
Feb
-12
Mar
-12
Ap
r-1
2
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
Dec
-12
Jan
-13
Feb
-13
Mar
-13
Monthly Variation (RHS) Total
19
Share of Retail Investors through TD is not Representative (% of Overall Debt)
Cross-Country Comparison
0101
05
15
17
0
2
4
6
8
10
12
14
16
18
Brazil USA Sweden Ireland UK
20
Great Increase Potential
Looking Ahead
» Computers base-> 99 mn (2012)
» 1 Computer out of 2 inhabitants
» 94 mn internet users
» 71.43% of households have Internet
» E-commerce traded R$22.5 bn in 2012
» Internet Banking -> 42 mn people in 2011.
» 24% of banking transactions
» 15.7 bn transactions
» 46% of active accounts
» 572 thousand investors with homebroker (2012)
» 15% of BM&FBOVESPA trades
21
Main Challenges
Looking Ahead
» Work on distribution channels
» Banks are not interested in selling Tesouro Direto bonds. They prefer to sell their own
financial products, through which they raise capital. Tesouro Direto only gives operational
fees.
» Identify the investor needs
» The Treasury is hiring a survey company in order to understand the main difficulties faced
by the potential investors.
» Invest on advertising and financial education
22
For additional information access the National Treasury website:
https://www.tesouro.fazenda.gov.br/en
Or contact Institutional Relations area:
The information on this presentation is issued by the Brazilian Debt Management Office (DMO) for informational purposes. It does not contain and is not an invitation or offer to buy or sell securities. Translation of the original text of this document is provided only for the convenience of the reader. While reasonable care has been taken to ensure the authenticity of the translation, its accuracy cannot be guaranteed. Reliance upon this translation shall be at the reader's own risk. Under no circumstances, shall the Brazilian National Treasury, its officers, employees or agents be liable to the reader or anyone else for any inaccuracy, error, inconsistency, omission, deletion, defect or alteration of the content of the translation from the original Portuguese text, regardless of cause, or for any damages resulting therefore. The original Portuguese text of this document is the only official version, which can be found in http://www.stn.fazenda.gov.br/index.asp. In the event of any discrepancy or contradiction between the Portuguese and translated version, the Portuguese version shall prevail.