ANALYSIS: In May in 2006 volume of transactions with foreign currency on KASE grew by 5.5% to equivalent of $2,539.3 m.

/IRBIS, Sergey Yakovlev, Andrey Tsalyuk, June 2, 06/ - In May in 2006 the volume of foreign currency transactions made in Kazakhstan stock exchange (KASE) reached the equivalent of USD2,539.3 m. or KZT311,029.1 m. Relative to April of 2006 volume of deals grew by USD132.5 m. (KZT7,235.5 m.) or by 5.51% in terms of dollar and by 2.38% in terms of tenge. Relative to May of 2005 trade volume increased 3.1 times in terms of dollar and 2.9 times in terms of tenge. The stake of this sector in stock exchange's turnover grew from 24.2% in April to 24.6% in May of 2006. Totally in May in 2006 on KASE (herewith and further on in brackets corresponding indicator of previous month is given) 5,342 (4,901) deals were made, including: in US dollars on TOD terms - 4,923 (4,892), on TOM terms - 412 (6), on SPOT terms - 3 (2); in euros - 0 (0), in Russian rouble - 4 (1). Total turnover of the stake of US dollar of exchange's currency market was 99.99% from the whole volume of made deals. Corresponding indicator of April was the same - 99.99%. In US dollars the volume of transactions on KASE in May reached $2,539.0 m. (KZT311.0 m.). In comparison with April of 2006 this figure equaled to $2,406.8 m. (KZT303.8 m.), in May of 2005 - $818.5 m. (KZT107,495.4 m.). In May in 2006 tenge strengthened against dollar. The speed of this process calculated at exchange's weighted average rate of the main session is estimated by the trend of 29.9% APR (April 30, 06 = KZT124.42; April 30, 06 = KZT124.42). In April in 2006 tenge strengthened against dollar with the speed of 37.7% APR. Weighted average rate of U.S. dollar against tenge, calculated on deals of the main session in May was KZT122.66 per unit, on all exchange's deals - 122.49. For April of 2006 these indicators were KZT126.22 and KZT126.22 per dollar. In euro stock exchange's market was characterized by zero activeness. No deals in this currency were made on KASE. In Russian rouble the volume of transactions on KASE in May in 2006 reached RUB8700 thousand per the sum of KZT39.2 m. (in April the volume of transactions did not exceed RUB600 th. per the sum of 2.8 m.). Judging by change of average weighted exchange rate (April 30, 06 = 4.6340; May 31, 06 = 4.5090), for analyzed month tenge strengthened against rouble with average speed 31.76% APR. In Kazakhstan market of USD May was similar to April and March. All these months are combined not only by similar conjuncture of the market, but well- expressed rhythmic change of volume of trades and the rate of American currency. By largest volume of transactions and speed of tenge strengthening against dollar the middle of the month was characterized, so-called "tax week". For the first decade vague calm was characterized, stipulated by absence of big lots of currency proceeds in the market. The end of month, as a rule, was lasting within the context of compensation movement of the market up, which brought dollar out of resold condition. To specialists' mind of IRBIS, described rhythm testifies most of all about that clients of the banks prefer currently to convert their currency proceeds into tenge at once and practically do not form reserves in foreign currency. Having analyzed the lessons in April, the head bank of the country conducted stricter regulating of dollar market in May, preventing excessive strengthening of tenge by grown volume of interventions of national currency. The last one was taken out of circulation on Fridays through sales of notes, the volume of separate issues of which was increased by the National Bank from KZT60.0 bn. to KZT100.0 bn. Simultaneously yield of notes on offering in the primary market has grown. More active participation of the head bank in exchange's trades in USD on KASE was the main reason for growth of exchange's turnover in May as regards previous month. June in Kazakhstan internal market of dollar, foreseen by specialists of IRBIS will be calmer concerning prices and in view of activeness of trading. But this scenario is not a single possible. Introduction of new prudential standards on currency positions together with new system of reserve requirements into action may cause different reaction at different banks. However, it's less possible that innovations will cause demand increasing for dollar inland of Kazakhstan. Hence, the analysts of IRBIS are forecasting further strengthening of tenge against dollar, speed of which within summer may be significantly reduced. [2006-06-02]