CBPP3 buying registered a slight increase in pace last week as market activity picked up after the holiday period, and analysts expect portfolio growth to be boosted in the coming weeks with the return of new issuance, although August purchases are still set to be the lowest of any month.

European Central Bank figures released on Monday show that settled and outstanding purchases under the third covered bond purchase programme increased Eu849m, from Eu188.360bn to Eu189.209bn, in the week to last Friday. Portfolio redemption figures released yesterday (Tuesday) afternoon show that no CBPP3-holdings matured last week.

The latest week’s figure compares with a gross increase of Eu721m in the previous reporting period, when Eu400m of CBPP3-holdings matured.

With no CBPP3-eligible issuance settling last week, secondary market purchases averaged Eu169.8m per day, up from around Eu132m per day in the previous two reporting periods.

Analysts noted that last week’s gross increase is the highest since mid-July, after CBPP3 buying eased on the back of a lull in market activity in the first three weeks of August, as had been expected.

Some Eu2.75bn of CBPP3-eligible benchmark issuance will settle this week, and analysts said next Monday’s CBPP3 figure should therefore show a substantial increase in purchases on the back of around Eu1bn of primary market settlements.

However, analysts said that despite this pick-up in buying, August CBPP3 portfolio growth will still be one of the lowest since the programme began. Gross CBPP3 purchases of Eu2.975bn and a net increase of Eu2.575bn so far this month – as of last Friday – suggest that August purchases will be well below the previous low set in July, when gross purchases were Eu4.3bn and the net increase was Eu3.258bn.

“Although Monday’s figures do not capture the last three days of the month, August is set to be a slow month for both CBPP3 and ABSPP,” said analysts at Société Générale.

Overall asset purchase programme (APP) buying totalled Eu12.566bn last week, down from Eu13.731bn in the previous week, as buying under the public sector purchase programme (PSPP) and the corporate sector purchase programme (CSPP) fell.