Online purchase of public bonds breaks record in Brazil

Attracted by security and profitability, investors have bought bonds from the government with increasing frequency. The sales of public bonds to natural persons through the internet—as part of the so-called Direct Treasury Program—amounted to $1.38 billion at the end of August, 2014—up 37.4% from the eight first months last year, the National Treasury reports.

The figure is the highest observed since the initiative was launched, in 2002. The nature of the transactions indicates that most buyers have sought to protect themselves from inflation. This year, the most sought-after bonds were those adjusted according to the National Broad Consumer Price Index (known as IPCA), which account for 49.94% of sales from January to August.

Lower investments are still the entrepreneurs' favorite. Sales below $2 thousand answer to 63.4% of the operations carried out this year. “[The program] was created precisely to attract the small investor, who can discover other kinds of investments in the financial system,” says Fernando Garrido, Coordinator-General for Public Debt Operations.

The number of investors registered in the initiative reached  419,037—up 15.7% from 12 months ago.

In Garrido's view, the cost of the bonds and the greater knowledge showed by the population have contributed to making the program as disseminated as it is today. “These bonds yield approximately 12.3% per annum. It's an investment with safe yield. This attracts investors seeking security,” he argues.

Also, the increasing number of members has expanded the volume of bonds invested in through the program—which currently adds up to $5.69 billion, an increase of 22.63% compared to the end of the previous year. Of this total, 64% correspond to bonds adjusted by inflation.

The initiative was created in January 2002 in a bid to make this kind of investment popular and allow natural persons to buy bonds directly from the National Treasury through the internet, with no financial agents working as mediators. All buyers have to do is pay a fee to the broker in charge of keeping the bonds.

Translated by Fabrício Ferreira