ANALYSIS: In March 2007 the repo market lost activity, being off the replenishment by National Bank

/IRBIS, Valeriy Khegay, Adrey Tsalyuk, April 11, 07/ - In March 2007 at Kazakhstan stock exchange (KASE) in the sector of repo operations 5,684 deals were registered for a total of KZT1,698.2 bn. or USD13,679.7 m. at the current rate on dates of concluding deals, which is 65.1% of the total turnover of KASE in the given month (in February 2007 - 73.0%). Compared to February 2007 the volume of transactions decreased by KZT339.3 bn. ($2,663.9 m.) or by 16.7% (by 16.3% in dollars). Relative to March 2006 the volume of transactions increased by KZT1,098.3 bn. ($9,022.8 m.) or 2.8 times (2.9 times in dollars). Stake of the exchange turnover in the total volume of repo deals on Kazakhstan market in March on comparable operations totaled 99.99%, in February 2007 - 99.5%. Structure of repo market turnover at KASE in March was as follows: - the stake of automatic repo transactions was 91.4% of the sector's turnover (KZT1,551.4 bn.), including deals in government securities (GS) - 69.2% (KZT1,175.2 bn.), deals in corporate securities (CS) - 22.2% (KZT376.3 bn.); - the stake of repo transactions, conducted by nego deals method, was 8.6% of the sector's turnover (KZT146.8 bn.), including deals in GS - 0.5% (KZT8.4 bn.), deals in CS - 8.1% (KZT138.4 bn.). For comparison, structure of stock exchange's repo market in February 2007 was as follows: autorepo - 95.5% (GS - 83.3%; CS - 12.2%); repo by nego method - 4.5% (GS - 0.3%; CS - 4.2%). The above given data allow to talk about serious changes, happened in March on repo market. First of all, it is notable that the structure of turnover has been changed. The stake of automatic repo operations with GS, and even their volume, has substantially increased. In the same period volume and stake of repo operations with CS have increased (automatic and by nego deals' method). As a result of the above-said the market activity of dropped. IRBIS specialists are traditionally looking for reasons of changes of the repo market conjuncture in the sector of USD circulation. he offbeat characteristic of March was the fact that US market was developing without partaking of the National Bank. That is, the second tier banks turned out being off tenge replenishment, which is traditional now while having big volumes of USD purchase b the National bank. The effect of this fact brought to drop of the volume of free funds' offering on repo market (and first of all, on GS atomatic repo market), which negatively affected exchange turnover of the sector. At the same time volume of deals with shares on KASE in March relative to February grew almost two times. Only this factor, in opinion of IRBIS analysts, led to increasing the turnover of CS repo operations. It was rather interesting peculiarity of March to find out drop of 'overnight' repo rates, happened regardless IRBIS predictions. Effects of the above- described factors must have brought to reverse effect. Nevertheless, the weighted average value TONIA indicator decreased in March to 1.46% APR from 2.20% APR in February. IRBIS analysts are inclined to explain this peculiarity somewhat with big volatility of 'overnight' repo rates, which has been observed this year, partly with the fact that banks have been satisfying their demand for tenge mainly via selling dollars on KASE, but not borrowing tenge in the market as short money. The last did not allow sellers to speculate upward to increase their price. Below tables are given, which characterize primary segments of repo market of KASE in March 2007 on opening operations in tenge (market's stake in titles of tables is given according to the actual volume of operations, including deals of opening and closing repo; information on direct deals with CS (8.1% of the market) are not published due to a very big volume of the table). Automatic repo with GS - 69.2% of the market ------------------------------------------------------------------------- Repo rate, % APR Num- Instrument ------------------------------------- Volume, ber Market (currency, on first mini- maxi- on last weighted KZT of share, term, days) deal mum mum deal average m. deals % ----------- -------- ----- ----- ------- -------- ---------- ----- ------ KZT_001 3.00 0.30 5.00 2.50 1.46 531,202.27 1137 86.85 KZT_002 6.00 1.30 6.00 4.00 3.80 39,969.02 62 6.54 KZT_003 3.00 1.30 5.00 2.50 2.57 31,112.02 51 5.09 KZT_007 4.00 3.00 4.50 4.00 4.02 8,556.01 26 1.40 KZT_014 4.00 500.00 1 0.08 KZT_028 4.70 4.70 4.70 4.70 4.70 261.00 4 0.04 ----------- -------- ----- ----- ------- -------- ---------- ----- ------ TOTAL 611,600.3 1,281 100 ------------------------------------------------------------------------- Automatic repo with CS - 22.2% 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 3.00 3.00 4.00 4.00 3.56 160.06 4 0.08 ASBN_014 6.50 6.50 7.40 7.40 6.84 201.05 5 0.10 ASBN_060 8.00 1,853.02 1 0.92 ASBNb3_001 4.50 4.50 5.50 5.50 5.25 656.00 4 0.33 ASBNb3_003 5.00 5.00 5.50 5.50 5.25 325.00 2 0.16 ASBNb3_007 6.50 6.50 6.50 6.50 6.50 327.00 2 0.16 ASBNb4_001 5.50 5.50 5.50 5.50 5.50 760.00 6 0.38 ASBNb4_007 6.50 127.00 1 0.06 ASBNb4_014 6.50 6.50 6.50 6.50 6.50 108.00 3 0.05 ASBNb7_007 5.80 5.80 5.80 5.80 5.80 1,015.00 4 0.51 ASBNb8_007 5.50 5.50 5.80 5.80 5.78 1,015.00 6 0.51 ASBNp1_000 1.00 215.01 1 0.11 ASFI_007 6.00 6.00 6.00 6.00 6.00 633.01 3 0.31 ASFI_014 8.00 400.00 1 0.20 ASFI_030 9.00 9.00 10.00 10.00 9.02 649.01 4 0.32 ASFIb5_003 4.50 4.50 5.50 5.50 5.05 713.00 5 0.35 ASFIb5_007 6.50 6.50 6.70 6.50 6.54 1,565.00 5 0.78 ASFIb5_014 6.50 6.50 6.50 6.50 6.50 150.00 2 0.07 ASFIb7_001 4.50 4.30 5.50 5.50 4.88 3,420.00 5 1.70 ASFIb7_003 4.50 4.50 5.00 5.00 4.74 1,720.00 3 0.86 ASFIb7_007 6.50 6.50 6.50 6.50 6.50 2,431.00 3 1.21 ASFIb7_014 7.20 400.00 1 0.20 ASFIp_028 9.00 9.00 9.00 9.00 9.00 3,200.00 2 1.59 ATFB_001 3.50 73.00 1 0.04 ATFB_007 6.50 6.00 6.50 6.00 6.32 225.01 6 0.11 ATFB_028 6.50 13.00 1 0.01 ATFBb4_001 2.00 2.00 5.50 5.50 5.44 305.00 3 0.15 ATFBb4_002 6.30 5.50 6.30 5.50 6.06 2,028.00 5 1.01 ATFBb4_014 6.70 6.70 6.70 6.70 6.70 652.00 2 0.32 ATFBp8_001 4.50 3.50 4.50 3.75 4.22 1,098.00 7 0.55 ATFBp8_007 6.70 6.70 8.00 7.50 7.27 1,033.00 4 0.51 BTAIb10028 8.30 8.30 8.30 8.30 8.30 1,783.00 2 0.89 BTAIb12030 9.00 195.00 1 0.10 BTAIb5_014 6.80 6.80 6.80 6.80 6.80 460.00 3 0.23 BTAS_001 4.50 2.00 6.00 5.00 3.98 5,831.84 17 2.90 BTAS_007 6.80 6.50 10.00 10.00 6.84 9,411.03 19 4.68 BTAS_030 7.00 5.50 12.00 7.00 6.89 18,894.50 53 9.40 BTAS_090 9.00 307.01 1 0.15 BTASb1_028 7.80 760.00 1 0.38 BTASb4_014 6.50 6.50 7.00 7.00 6.75 86.01 2 0.04 BTASb5_007 6.90 6.90 7.10 7.10 7.01 1,072.04 8 0.53 BTASb7_001 4.00 3.30 5.00 5.00 4.03 1,818.04 9 0.90 BTASb7_007 6.30 6.00 6.50 6.50 6.48 1,626.03 6 0.81 BTASb7_030 8.00 8.00 8.00 8.00 8.00 4,000.04 8 1.99 CCBN_001 4.00 3.50 6.50 4.50 4.97 3,043.01 21 1.51 CCBN_030 7.00 7.00 8.00 7.50 7.56 630.00 6 0.31 CSBNb4_007 6.70 6.50 6.70 6.50 6.54 596.03 3 0.30 CSBNb5_001 5.00 4.00 5.50 5.50 5.10 1,504.05 8 0.75 CSBNb5_007 6.50 6.50 6.50 6.50 6.50 376.02 2 0.19 DNBN_028 8.50 8.50 8.50 8.50 8.50 238.00 2 0.12 EUBNb3_001 4.50 3.50 5.50 5.50 4.81 2,378.00 9 1.18 EUBNb3_007 6.30 6.30 6.50 6.50 6.39 871.00 4 0.43 EUBNb3_014 6.70 6.70 7.00 7.00 6.96 1,595.00 8 0.79 KKGB_001 4.00 4.00 5.30 5.30 4.82 538.00 4 0.27 KKGB_007 6.50 137.00 1 0.07 KKGB_028 8.00 44.00 1 0.02 KKGBb2_028 7.80 277.03 1 0.14 KKGBb4_014 7.75 113.00 1 0.06 KKGBp_001 4.00 3.50 5.50 5.50 4.75 1,211.00 8 0.60 KKGBp_007 6.50 3.00 6.70 3.00 5.10 1,047.00 9 0.52 KKGBp_014 7.00 3.00 7.00 3.00 5.06 875.00 3 0.44 KKGBp_028 3.00 3.00 3.00 3.00 3.00 2,900.00 14 1.44 KZTC_001 3.50 3.00 9.20 3.00 4.68 49,519.92 403 24.64 KZTC_007 6.50 5.00 10.65 5.50 6.43 18,071.48 84 8.99 KZTC_014 7.00 6.00 9.00 6.00 8.86 1,390.07 10 0.69 KZTC_028 7.00 6.75 9.20 7.00 7.46 8,832.25 40 4.39 KZTC_090 8.50 7.30 8.50 7.30 7.38 1,069.01 5 0.53 KZTCb1_001 4.00 3.50 4.00 3.50 3.77 88.00 3 0.04 KZTCb1_007 6.50 6.50 6.70 6.70 6.63 60.00 2 0.03 KZTK_001 3.50 3.00 3.75 3.00 3.50 3,089.44 20 1.54 KZTK_003 4.00 400.00 1 0.20 KZTK_007 6.00 3.00 6.00 6.00 4.14 2,391.13 10 1.19 KZTK_014 6.80 3.00 6.80 3.00 4.24 739.11 8 0.37 KZTK_028 3.00 3.00 3.00 3.00 3.00 2,620.14 9 1.30 NFBN_028 7.30 33.00 1 0.02 NFBNb1_028 8.00 8.00 8.50 8.50 8.04 124.00 4 0.06 NFBNb1_090 9.50 150.00 1 0.07 NRBNb2_007 6.50 6.50 6.50 6.50 6.50 1,009.02 2 0.50 NRBNb4_001 4.30 4.30 5.30 4.50 4.70 1,094.00 3 0.54 NRBNb4_003 5.00 365.00 1 0.18 NRBNb4_007 6.50 6.50 6.50 6.50 6.50 1,113.00 3 0.55 NRBNb5_001 3.50 3.50 4.50 4.50 4.21 980.00 4 0.49 NRBNb5_003 4.00 4.00 4.50 4.50 4.45 110.00 2 0.05 NRBNb5_007 6.00 6.00 7.00 7.00 6.50 2,400.00 3 1.19 ORDB_028 11.00 8.00 11.50 8.00 9.81 1,287.02 16 0.64 ORDB_090 10.00 10.00 10.00 10.00 10.00 300.01 3 0.15 ORNKb1_028 8.00 8.00 8.52 8.50 8.31 421.00 4 0.21 RDGZ_001 4.50 4.00 4.50 4.50 4.30 1,568.05 8 0.78 RDGZ_007 6.70 6.50 6.70 6.50 6.57 686.02 3 0.34 RGBRb4_001 4.15 4.00 4.50 4.50 4.15 181.00 3 0.09 RGBRb4_007 6.35 6.35 6.35 6.35 6.35 100.00 2 0.05 RGBRb4_014 7.00 7.00 8.00 8.00 7.63 538.00 10 0.27 TEBN_007 10.00 195.00 1 0.10 TSBN_007 6.50 5.50 6.50 5.50 6.48 453.01 5 0.23 TSBN_030 10.00 10.00 10.00 10.00 10.00 34.00 3 0.02 TSBNb1_001 5.00 3.50 5.50 5.50 5.00 2,260.00 14 1.12 TSBNb1_007 6.50 6.50 6.50 6.50 6.50 331.00 2 0.16 UTMK_030 9.00 9.00 9.00 9.00 9.00 4,896.10 9 2.44 ----------- -------- ----- ----- ------- -------- --------- ------ ------ TOTAL 200,986.6 1,039 100 ------------------------------------------------------------------------- Repo on direct deals with GS - 0.5% 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 % ------- -------- ----- ----- ------- -------- -------- ------ ------ 3 8.00 1,503.80 1 35.83 4 2.20 2.00 3.50 3.50 2.54 231.13 4 5.51 5 0.15 15.12 1 0.36 6 3.00 3.00 3.00 3.00 3.00 500.00 6 11.91 9 3.00 200.00 1 4.76 13 5.43 5.43 5.43 5.43 5.43 1,670.00 6 39.79 25 4.50 60.00 1 1.43 61 6.00 17.34 1 0.41 ------- -------- ----- ----- ------- -------- -------- ------ ------ TOTAL 4,197.4 21 100 ---------------------------------------------------------------------------- [2007-04-11]