Italian retail investors snapped up the country's troubled government bonds on Monday, traders and bank clerks said, but the success of the BTP Day campaign will do little to ease the mounting pressure on the country's borrowing costs.
Italian banks agreed as part of the campaign to waive fees charged to clients on purchases of government bonds, or BTPs, following an appeal this month to support Italy's battered debt, launched this month by Italian businessman Giuliano Melani.
No official figures were released on the amounts bought, but Hi-Mtf, the smallest of three fixed-income retail trading platforms, said it had taken 11,268 orders as of 3:10 p.m. British time for a combined 278 million euros. That compared with its daily average this year of 1,200 orders for 46 million euros.
We are getting lots of small orders -- 2,000, 10,000, 20,000 euros. The response from citizens has been strong, it feels a bit like a referendum, Hi-Mtf head Gianbattista Roversi told Reuters.
A trader at a primary bank said he himself had also bought some BTPs.
If we can't buy BTPs then we can't buy anything. And if the day ever came in which Italy doesn't pay them back, then the money lost would be the least of our problems, he said, asking not to be named.
Bank clerks at some branches visited or contacted by Reuters said clients had walked in on Monday asking to buy BTP bonds, especially shorter maturities.
At one branch near Milan's central Duomo square a clerk said the bank had fallen behind in processing requests from clients because the system was overloaded.
One prominent Italian missed the rush, however.
I didn't buy anything, I have been here all day, former Prime Minister Silvio Berlusconi told reporters on the sidelines of a court hearing in Milan where he is a defendant in a bribery trial.
But the success of BTP Day, which will be repeated on December 12 for shorter maturities, will not make much of a difference for Italy's strained public finances.
Saddled with a debt pile equal to 120 percent of its GDP and soaring borrowing costs, Italy has been battling to avoid financial disaster, which analysts say would endanger the whole of the euro zone.
The BTP Day initiative is betting on chauvinism. It's definitely good marketing, said a bond a trader at an Italian brokerage firm.
It won't really make an impact, but I think it signals a change of mood in Italy after the selfish years of Berlusconi, who had made people dream about getting richer... It feels good.
Domestic buying has helped Italy draw sufficient demand at auctions since the euro zone's third-largest economy came to the fore of the debt crisis in early July, but yields have spiralled to levels seen as unsustainable in the long term.
The Bank of Italy estimates that foreign investors in June held around 46 percent of Italy's nearly 1.6 trillion euro bonds and bills. Italian households hold around 14 percent.
Wealthy Italian retail investors are a key resource for the Treasury which is planning to directly tap them from next year, using online trading systems for its debt sales.
In a sign of intense market stress, short-term Italian yields last week climbed above those of longer-dated issues. Both are higher than the 7 percent level widely seen as unsustainable for the country's public finances.
The Treasury plans to sell up to 8 billion euros of bonds on Tuesday.
(Additional reporting by Elvira Pollina, Michel Rose and Silvia Aloisi)