ANALYSIS: In June of 2006 absence of GS offering on KASE was compensated by stirring up of purchase and sale secondary market on these bonds

/IRBIS, Assel Omarova, Andrey Tsalyuk, July 5, 06, resent I connection with new edition of the block and additions/ - In June of 2006 on Kazakhstan stock exchange (KASE) in GS purchase and sale sector 133 deals for a total of KZT44,177.5 m. are registered (equivalent of 368.8 m. US dollar), which amounted 3.4% from the total exchange turnover of the month (in May - 3.5%). Relative to May of 2006, turnover of the sector decreased by 1.5% in tenge and grew by 0.5% in dollar expression. Relative to June of year 2005, turnover of the sector decreased by 25.0% in tenge or by 15.9% in dollar expression. In sector of primary market specialized trades were not held, whereas in May deals volume in this sector totaled KZT15,577.2 m. (equivalent of $127.5 m.). Ministry of finance did not inform KASE about the reason, by which they refused of planned offering on MEOKAM-60 on June 28 for total of KZT10.0 bn. Absence of offering on exchange market did not affect practically total GS turnover on KASE, as it was compensated by growth of secondary market turnover. Results of analysis, conducted by IRBIS specialists allow to confirm that the main reason for stirring up of secondary market was appearance of new bonds there - MEUKAM-120, offered by Ministry of finance on May 31 for total amount of face value KZT5.0 bn. These securities were being repurchased active on KASE, and only for them did investors prepare their portfolios. Investors of different categories took part in MEUKAM deals. However, subjects of pension market and broker-dealer companies demonstrated the biggest interest in work on these bonds. Statistic indicators of Kazakhstan GS purchase and sale sector in June and the structure of the secondary market turnover are given in the table (in parentheses - comparable indicators of previous month). The stake of exchange turnover within total volume of GS purchase and sale deals on secondary of Kazakhstan decreased in June up to 65.3%. This indicator was 72.0% in May. ------------------------------------------------------------------------------- Yield to maturity for a buyer,% year. Maturity ----------------------------------- Volume, m. term, last weighted tenge in Number days min max deal average market price of deals -------------- ------- ------ ------ ------------- ------------------- -------- Discount GS (KZT): МЕККАМ, notes of National bank - 60.7% (72.8%) of the market ------------------------------------------------------------------------------- less than 8 1.50 2.56 2.41 2.37 (1.88) 2,940.7 10 8 - 14 1.50 3.65 2.78 2.95 (2.34) 6,926.8 17 15 - 28 2.65 3.50 3.05 3.13 (2.72) 16,929.5 27 -------------- ------- ------ ------ ------------- ------------------- -------- Subtotal 26,796.9 (21,309.1) 54 (58) -------------- ------- ------ ------ ------------- ------------------- -------- Coupon GS (KZT): МЕОКАМ, MEUKAM - 39.3% (27.2%) of the market ------------------------------------------------------------------------------- less than 730 2.61 3.70 3.50 3.44 (3.28) 4,590.0 20 731 - 1095 3.35 3.54 3.54 3.45 ( -) 209.1 2 1096 - 1460 3.30 4.00 3.70 3.80 (3.02) 3,525.6 27 1461 - 1825 3.70 5.50 3.70 4.56 (4.10) 292.2 6 more than 2191 3.50 5.50 4.00 4.04 (4.05) 8,758.7 20 -------------- ------- ------ ------ ------------- ------------------- -------- Subtotal 17,375.5 (7,961.7) 75 (25) -------------- ------- ------ ------ ------------- ------------------- -------- Coupon GS (USD): bonds of Atyrau oblast and Astana city - 0.01% (0.02%) of the market ------------------------------------------------------------------------------- less than 730 2.50 5.20 5.20 3.71 (5.38) 5.04 4 -------------- ------- ------ ------ ------------- ------------------- -------- Subtotal 5.0 (7.3) 4 (5) -------------- ------- ------ ------ ------------- ------------------- -------- TOTAL 44,177.5 (29,278.2) 133 (89) ------------------------------------------------------------------------------- Data, presented in the table, allow to comment that generally demand for GS at their secondary circulation was less a bit than offering, this factor provoked growth of profitability of bonds to maturity for buyers. It is explained by the following, that the main GS source for investors currently is bonds offerings. There on auctions is possible to buy securities at more profitable price, and then to resell them on secondary market with positive price disparity. In opinion of IRBIS specialists, conjuncture of GS exchange market will depend in July mostly on plans of Ministry of finance on introducing of these bonds on exchange floor. These plans have not been articulated yet. [2006-07-05]