ANALYSIS: In September 2006 GS market on KASE did not pleased with the activity

/IRBIS, Ruslan Dzubaylo, Andrey Tsalyuk, November 9, 06/ - In October 2006 on Kazakhstan stock exchange (KASE) 122 deals were registered in government securities (GS) purchase and sale sector for the total of KZT62,003.5 m. (equivalent of $485.6 m.), that was 2.2% out of total exchange's turnover of the month (in September - 3.1%). Relative to September 2006 the sector's turnover decreased by 2.1% in tenge expression and by 3.1% in dollar terms. Relative to October of 2005 the turnover of the sector decreased by 4.0% in tenge expression and increased by 0.6% in dollar equivalent. In the primary market sector Ministry of finance carried out on October 30 the specialized trades on re-offering of MEUJKAM-180 of the third issue (KZKAKY150035, MUJ180_0003; KZT1,000, April 18, 06 - April 18, 21, annual coupon 0.01% APR + inflation, 30/365). Bids made 31.8% out of the announced volume of re-offering. 18 deals were made on re-offering of 7,474,000 bonds for the amount of borrowing at KZT7,753.2 m. Bonds were offered at duration of 5,208 days under forecasted 8.30-8.96% APR. Weighted average profitability of the re-offering made 8.55% APR to maturity for a purchaser. After carried out trades the volume of KZKAKY150035 issue reached 24,974,000 bonds. It is worthy to note the unusual low demand, announced on the auction by the subjects of pension market. It is not excluded that it is caused by significant delay, with which Ministry of finance had notified the participants of he market about conducting of the re-offering. The exchange had received the notification on October 27, on Friday and managed to publish the corresponding news only about 14:00. The other particularity of the auction had become the fact of satisfying by the issuer the whole applied demand. We'll remind that in September the volume of deals with GS on the primary market of KASE totaled KZT31,903.0 m. and $251.7 m., that is it exceeded the October indicator almost four times. In the secondary market sector the stake of the exchange turnover to the total volume purchase and sale deals on GS Kazakhstan secondary market in October increased by 70.6% (in September it totaled 65.7%). The activity of traders here had increased a little bit. The market had demonstrated not so evidently the excess of supply of securities as in September, because of more high level of short-term tenge liquidity. So the growth of maturity for buyers of GS on the secondary market was less expressed and mainly was observed at short bonds. As a whole it should be noted that the secondary market of GS on KASE still is absent. On the exchnage's platform with these bonds are making the separate deals, the summed volume of which was less then sum of offering on the whole primary market for 5.22 times. Statistical indicators of GS purchase-and sale sector in October and the structure of turnover of the secondary market are given in the table (in parentheses - comparative indicators of the previous month). ------------------------------------------------------------------------------ Yield to maturity for the buyer, %APR Term ------------------------------- Volume, m. KZT Number till maturity min max last WA at market price of deals -------------- ----- ---- ---- ------------ ------------------- -------- Discounted GS (KZT): National Bank's notes - 80.2% (79.1%) of the market ------------------------------------------------------------------------------ less 8 1.70 4.40 4.40 2.95,(2.99) 10,158.7 12 8 - 14 3.70 4.76 3.92 4.30,(3.96) 15,036.4 15 15 - 28 3.80 4.05 3.93 3.97,(3.82) 18,303.8 19 -------------- ----- ---- ---- ------------ ------------------- -------- Total 43,498.9 (24,851.9) 27 (27) -------------- ----- ---- ---- ------------ ------------------- -------- Coupon GS (KZT): MEOKAM, MEUKAM - 19.8% (15.5%) of the market ------------------------------------------------------------------------------ less than 730 3.35 9.29 5.51 5.65 (3.60) 4,098.0 28 731 - 1095 5.10 6.30 5.86 6.02 (3.77) 2,477.5 10 1096 - 1460 0.00 7.00 6.15 5.96 (6.31) 2,352.8 13 1461 - 1825 5.60 5.90 5.60 5.68 (4.23) 168.8 2 1826 - 2190 6.30 6.30 6.30 6.30 ( -) 1,203.2 2 more than 2191 5.50 5.50 5.50 5.50 (7.53) 449.5 2 -------------- ----- ---- ---- ------------ ------------------- -------- Total 10,749.8 (4,873.5) 57 (54) -------------- ----- ---- ---- ------------ ------------------- -------- Coupon GS (USD): bonds of Astana city - 0.003% (0.01%) out of the market ------------------------------------------------------------------------------ less than 730 5.50 5.50 5.50 5.50 (0.12) 1.5 1 -------------- ----- ---- ---- ------------ ------------------- -------- Total 1.5 (4.0) 1 (3) -------------- ----- ---- ---- ------------ ------------------- -------- GRANDTOTAL 54,250.3 (31,425.0) 104 (92) ------------------------------------------------------------------------------ [2006-11-09]