The decline in bidding at government bond auctions this year was led by the primary dealers needing to comply with Dodd- Frank financial reforms and Basel III banking regulations, as well as greater competition from direct bidders.
Dealers accounted for 46 percent of sales, the lowest since 2010, down from 49.7 percent last year.
Investors who aren’t primary dealers that placed bids directly with the Treasury bought a record 17.7 percent of the government securities this year, exceeding the previous all-time high of 14.4 percent last year. Indirect bidders, an investor class that includes foreign central banks, accounted for 36.3 percent of sales at auctions this year from 35.9 percent last year, Treasury data compiled by Bloomberg show.
“We still like Treasurys” and are buying them when yields rise, Sean Simko, who oversees $8 billion at SEI Investments Co. in Oaks, Pennsylvania, said in a Dec. 20 telephone interview. “You have the opportunity to selectively pick your points and add on to positions.”