Fixed Income Annual Report 2023

In this report, compiled by the Market Research Department team situated in Spain, they analyze economic growth, the development of public and corporate debt markets, as well as the impact of initiatives like the Alternative Fixed Income Market (MARF) and sustainable bond issuances.Some of the most notable aspects of the report include: 

Global Economy 

The year 2023 witnessed global economic growth that exceeded expectations, recording a solid 3%, amid a world landscape filled with challenges. In this scenario, Spain stood out as one of the fastest-growing economies, contributing significantly to the advancement of the euro area. 

Debt Markets 

Public and corporate debt markets experienced a year of stability and price recovery, offering attractive returns for investors. BME, as a reference in the sector, channeled an impressive total of 422 billion euros in fixed income issuances, demonstrating its fundamental role in the financial landscape. 

Primary Spanish Public Debt Market 

In 2023, the volume of Spanish public debt traded on BME's regulated Fixed Income Market reached 292 billion euros, showing an increase of 15.8% compared to the previous year. This occurred after the completion of the ECB's asset purchase programs aimed at combating the pandemic, which had facilitated debt issuance and kept interest rates low. Treasury medium and long-term issuances increased by 20%, while Treasury bills decreased by 3.4%. Additionally, Autonomous Communities debt issuance recovered with a 44% increase reaching 3.2 billion euros. 

The Changes of the New Securities Market Law 

On September 18, 2023, the provisions of the new Securities Markets and Investment Services Law (LMVSI) came into effect, modifying the verification and admission procedures for fixed income securities on regulated markets, with the intention of providing Spanish Fixed Income markets with a more agile, efficient, and competitive framework. 

 AIAF Market 

The high returns achieved by public debt across all maturities attracted a large number of new investors, resulting in an increase in trading volumes. 

Thus, in 2023, the total trading of public debt on the SENAF platform reserved for specialized wholesale financial entities increased by 68% to 161.99 billion euros, and on the SEND platform open to all types of investors, it reached nearly 22 billion euros with a 19% increase. The number of cross trades in 2023 also increased by 58% to 20,508 on the SENAF platform and by 290% on the SEND platform to 5,006 trades. 

MARF Celebrates Its Tenth Anniversary 

The tenth anniversary of the Alternative Fixed Income Market (MARF) marked an important milestone, with more than 70 billion euros raised in its first decade of operations. With 148 directly financed companies, MARF has provento be a crucial platform for corporate financing. 

Sustainability 

The push towards sustainability was also notable, with a significant increase in ESG debt issuances worldwide. In Spain, over 21.2 billion euros were issued in this type of bonds, reflecting a growing commitment to responsible financial practices. 

As we enter 2024, expectations of a new cycle in benchmark interest rates pose challenges and opportunities for investors. While economic and geopolitical uncertainties persist, the future of fixed income remains promising in an ever-changing world. 

Want to know more? Download the report through this link.