ANALYSIS: In December 2006 the remarkably high liquidity of tenge market resulted in the adventurous fall of repo rates on KASE

/IRBIS, Valeriy Khegay, Andrey Tsalyuk, January 10, 07/ - In December of 2006 Kazakhstan stock exchange (KASE) registered 4,609 deals in the repo transactions sector for a total of KZT1,695.7 bn. or USD13,258.9 m. at the current rate effective on deals making dates, which is 57.7% of the total turnover of KASE in this month (in November of 2006 - 58.0%). In comparison with November of 2006 volume of operations has increased by KZT182.8 bn. ($1,432.2 m.) or by 12.1% (by 12.1% in dollar terms). Relative to December of 2005 volume of operations has grown by KZT1,045.5 bn. ($8,400.8 m.) or 2.6 times (2.7 times in dollar terms). Stake of exchange's turnover in total volume of repo deals on Kazakhstan market in December on comparable operations totaled 99.7%, in November of 2006 - 100.0%. Structure of repo market turnover on KASE in December was as follows: - the stake of automatic repo transactions was 85.0% of the sector's turnover (KZT1,441.8 bn.), including deals in government securities (GS) - 71.2% (KZT1,208.0 bn.), deals in corporate securities (CS) - 13.8% (KZT233.8 bn.); - the stake of repo transactions made by nego deals method was 15.0% of the sector's turnover (KZT253.9 bn.), including deals in GS - 2.7% (KZT46.4 bn.), deals in CS - 12.2% (KZT207.5 bn.). For comparison, structure of stock exchange repo market in November of 2006 was characterized as follows: autorepo - 93.9% (GS - 76.9%; CS - 17.0%); repo by direct method - 6.1% (GS - 0.3%; CS - 5.8%). In the view of IRBIS specialists, the notable changes in the structure of repo market's turnover were caused by events, which took place on the market of shares, prices of which were growing in high temp, and by so-called final transactions of the year, by which participants of the market corrected their financial statements ahead of the year closing. Noteworthy, December differed a little from November on repo market. The conjuncture was formed by exceptionally high, abundant tenge liquidity, which was sterilized actively by the National Bank before year closing by additional auctions for offering of its notes. As reasons for forming a big amount of free money, it is logical to mention here first of all the purchase of big volumes of the American currency on the internal market, which were being bought by the head bank for tenge. Despite the following increase of profitability of its notes, the National bank failed to deactivate "the pressure" of free money upon market, as a result this fact led to the growth of repo operations and fall of the cost of more demanded short money. Moreover, it is notable that December rally on Kazakhstan shares market was injected to the certain extent by funds, borrowed on market of repo operations, which were conducted by negotiate deals method. The effext of this factor also positively affected upon the analyzed segment in the last month of the past year. Below the tables are given, characterizing the main segments of repo sector of KASE in Kazakhstan in December 2006 on tenge opening operations (market share in titles of the tables is given according to the actual volume of operations, including deals of opening and closing of repo; information on direct deals in CS (12.2% of the market) is not published by IRBIS because of a very big volume of the table). Automatic repo with GS - 71.2% of the market ------------------------------------------------------------------------- Repo rate, % APR Instrument ------------------------------------- Volume, Num- Market (currency, on first mini- maxi- on last weighted m. ber of share, term, days) deal mum mum deal average KZT deals % ----------- -------- ----- ----- ------- -------- --------- ------ ------ KZT_000 1.00 1.00 1.00 1.00 1.00 15,000.0 8 2.29 KZT_001 1.00 0.10 8.00 2.00 1.98 378,172.1 782 57.77 KZT_002 1.00 0.10 7.50 5.50 2.51 114,414.0 80 17.48 KZT_003 3.50 0.10 6.00 5.49 3.98 67,706.0 39 10.34 KZT_007 3.50 3.00 6.00 5.90 5.18 62,272.0 68 9.51 KZT_014 4.00 4.00 6.00 6.00 5.54 16,631.0 50 2.54 KZT_028 4.50 4.50 5.50 5.50 4.73 373.0 2 0.06 ----------- -------- ----- ----- ------- -------- --------- ------ ------ TOTAL 654,568.2 1,029 100 ------------------------------------------------------------------------- Automatic repo with CS - 13.8% of the market ------------------------------------------------------------------------- Repo rate, % APR Instrument ------------------------------------- Volume, Num- Market (security, on first mini- maxi- on last weighted m. ber of share, term, days) deal mum mum deal average KZT deals % ----------- -------- ----- ----- ------- -------- --------- ------ ------ ASBN_001 4.00 4.00 4.00 4.00 4.00 290.0 2 0.22 ASBNb3_001 3.50 3.00 3.50 3.00 3.25 338.0 2 0.26 ASBNb3_003 4.50 50.0 1 0.04 ASBNb3_007 7.50 172.0 1 0.13 ASBNb4_001 3.50 3.00 3.50 3.00 3.25 246.0 2 0.19 ASBNb4_014 7.50 123.0 1 0.10 ASBNp1_000 3.00 2.00 3.00 2.00 2.75 400.0 2 0.31 ASBNp1_001 3.00 3.00 6.00 4.00 4.15 3,060.1 15 2.37 ASBNp1_007 4.00 4.00 4.00 4.00 4.00 200.0 2 0.16 ASFI_030 6.00 6.00 6.00 6.00 6.00 633.0 3 0.49 ASFIb5_003 4.50 4.00 4.50 4.50 4.27 1,472.0 3 1.14 ASFIb5_014 7.50 685.0 1 0.53 ASFIb7_001 4.00 3.00 4.00 3.00 3.50 3,769.0 3 2.92 ASFIb7_014 7.50 1,202.0 1 0.93 ATFB_001 3.00 50.0 1 0.04 ATFB_007 6.00 121.0 1 0.09 ATFB_028 9.00 7.00 9.00 7.00 8.60 65.0 2 0.05 ATFBb5_014 5.00 1,200.0 1 0.93 ATFBp8_001 3.50 3.00 3.50 3.00 3.29 868.0 3 0.67 ATFBp8_007 5.00 5.00 7.50 7.50 7.28 393.0 2 0.30 BTAIb10028 5.80 764.0 1 0.59 BTAIb5_014 5.00 1,300.0 1 1.01 BTAIb7_014 5.00 800.0 1 0.62 BTAS_001 5.00 3.00 9.00 3.00 5.80 2,935.5 36 2.28 BTAS_007 8.00 5.00 8.00 6.70 6.68 3,442.6 20 2.67 BTAS_030 6.50 5.00 9.00 7.00 7.08 13,613.2 33 10.56 BTAS_090 9.00 300.1 1 0.23 BTASb5_007 6.20 696.0 1 0.54 BTASb7_001 3.00 3.00 3.00 3.00 3.00 261.0 8 0.20 BTASb7_007 3.00 3.00 6.20 6.20 5.92 466.0 2 0.36 BTASb7_030 8.00 8.00 8.00 8.00 8.00 2,000.0 4 1.55 BTTRb1_014 5.00 5.00 5.00 5.00 5.00 4,000.0 2 3.10 CCBN_001 4.95 4.95 7.00 7.00 6.32 150.0 3 0.12 CCBN_030 7.00 178.0 1 0.14 CCBNb10014 5.00 900.0 1 0.70 CCBNb12014 5.00 5.00 5.00 5.00 5.00 1,150.0 2 0.89 CSBNb4_007 7.50 239.0 1 0.19 CSBNb5_001 3.50 3.00 3.50 3.00 3.25 396.0 2 0.31 CSBNb5_007 7.50 198.0 1 0.15 EUBNb3_001 5.30 4.50 5.30 4.95 4.77 2,850.0 8 2.21 EUBNb3_007 6.20 6.20 7.00 7.00 6.82 609.0 2 0.47 EUBNb3_014 7.50 7.50 7.50 7.50 7.50 400.0 2 0.31 FRMPb1_014 5.00 1,600.0 1 1.24 KASTb1_014 5.00 5.00 5.00 5.00 5.00 2,700.0 2 2.09 KASTb2_014 5.00 545.0 1 0.42 KKAGb3_001 6.50 4.00 6.50 4.00 5.47 604.0 3 0.47 KKAGb3_014 7.00 155.0 1 0.12 KKGB_001 3.00 3.00 8.00 5.00 4.25 570.0 4 0.44 KKGB_007 5.50 230.0 1 0.18 KKGB_028 8.00 7.75 8.00 7.75 7.83 143.0 2 0.11 KKGBp_001 5.30 4.65 5.30 4.95 4.88 676.0 4 0.52 KKGBp_007 7.00 176.0 1 0.14 KKGBp_028 6.50 6.50 7.00 7.00 6.76 27.0 2 0.02 KZIKb9_014 5.00 800.0 1 0.62 KZTC_001 3.00 1.00 5.30 3.50 3.84 36,035.2 183 27.95 KZTC_007 6.00 5.00 8.00 6.00 5.99 10,065.4 57 7.81 KZTC_028 7.50 6.00 9.00 7.75 7.97 6,198.2 28 4.81 KZTC_090 8.50 95.0 1 0.07 KZTCb1_001 4.65 42.0 1 0.03 KZZN_001 4.50 4.50 4.65 4.65 4.58 91.0 2 0.07 NFBNb1_001 4.50 4.50 4.50 4.50 4.50 450.0 3 0.35 NFBNb1_007 6.00 25.0 1 0.02 NFBNb1_028 9.00 7.40 9.00 9.00 7.51 64.0 4 0.05 NRBNb4_001 4.50 384.0 1 0.30 NRBNb4_090 7.00 7.00 7.00 7.00 7.00 712.0 3 0.55 NRBNb5_003 4.00 4.00 4.00 4.00 4.00 1,618.0 2 1.25 NRBNb5_007 7.50 810.0 1 0.63 NRBNb5_090 7.00 7.00 7.00 7.00 7.00 250.0 2 0.19 ORDB_028 10.00 140.0 1 0.11 ORDB_090 8.00 8.00 8.00 8.00 8.00 300.0 3 0.23 PRKRb2_014 5.00 5.00 5.00 5.00 5.00 2,100.0 2 1.63 RDGZ_001 3.00 3.00 5.30 5.30 5.04 226.0 2 0.18 RDGZ_007 4.50 56.0 1 0.04 RDGZ_014 7.50 223.0 1 0.17 RDGZ_028 7.00 13.0 1 0.01 RGBRb4_001 4.00 2.00 5.75 2.00 4.43 274.0 5 0.21 RGBRb4_007 6.00 5.00 7.00 6.50 6.35 1,645.0 28 1.28 ROSA_014 7.00 7.00 7.00 7.00 7.00 271.0 2 0.21 TSBNb1_001 4.65 4.65 4.65 4.65 4.65 440.0 3 0.34 TXBNb2_014 5.00 300.0 1 0.23 UTMK_030 8.00 8.00 9.00 9.00 8.68 4,896.1 9 3.80 ----------- -------- ----- ----- ------- -------- --------- ------ ------ TOTAL 128,935.4 553 100 ------------------------------------------------------------------------- Repo on direct deals with GS - 2.3% of the market ---------------------------------------------------------------------------- Repo rate, % APR Term of ----------------------------------------- Volume, Num- Market repo, on first mini- maxi- on last weighted m. ber of share, days deal mum mum deal average KZT deals % ------- -------- ----- ----- ------- -------- -------- ------ ------ 5 4.00 4.00 4.00 4.00 4.00 5,000.0 3 10.99 7 3.86 3.00 5.00 5.00 3.50 20,164.0 16 44.33 8 4.00 4.00 4.20 4.20 4.10 20,000.0 11 43.97 10 1.00 245.4 1 0.54 182 5.00 77.0 1 0.17 ------- -------- ----- ----- ------- -------- -------- ------ ------ TOTAL 45,486.4 32 100 ---------------------------------------------------------------------------- [2007-01-10]