ANALYSIS: In June 2007 dollar rate on KASE had stabilized under influence of main player

/IRBIS, Sergey Yakovlev, Andrey Tsalyuk, July 11, 07/ - In June of 2007 volume of operations with foreign currency on Kazakhstan stock exchange (KASE) made the equivalent of USD10,318.6 m. or KZT1,259,146.3 m. The mentioned turnover is the largest monthly turnover of foreign currency on KASE for the whole history of exchange's existence. Previous record was registered on KASE in November 2006 when volume of exchange deals with foreign currencies made the equivalent $7,264.0 m. or KZT929,124.8 m.. Relative to May of 2007 volume of deals in here has increased by $3,188.3 m. (KZT401,043.8 m.) or by 44.3% (46.7%). Relative to June of 2006 volume of trades has increased 6.6 times in dollar and 6.7 times in tenge equivalent. Stake of this sector in exchange turnover has increased from 28.7% in May to 29.1% in June 2007. In all, in June 2007 on KASE 7,139 (5,640) deals were concluded (here and hereinafter corresponding indicator of the previous month is given in parentheses), including: in US dollar on TOD terms - 6,638 (5,091), on TOM terms - 451 (500); on SPOT terms - 32 (29); in euro - 0 (0), in Russian ruble - 18 (20). In the total turnover of exchange currency market in June 2007 99.98% of the total volume of concluded deals accounted for US dollar. Corresponding indicator of the previous month - 99.96%. In June morning (main) session controlled 43.9% (42.1%) of exchange's turnover of currency market. To the stake of day session came 45.0% (40.2%), evening session - 11.1% (17.7%).. On US dollar volume of operations on KASE in June totaled $10,316.4 m. (KZT1,258,883 m.). For comparison, in May 2007 this indicator totaled $7,127.7 m. (KZT857,797.0 m.), in June 2006 - $1,563.0 m. (KZT186,685.8 m.). In June 2007 tenge to dollar strengthened with rate 1.1% APR. Last month the speed of devaluating to dollar made 22.7% APR. Weighted average US dollar rate to tenge, calculated on deals of the primary session of June 2007 - KZT122.01 per a unit, on all exchange deals - KZT122.03. For May 2007 corresponding indicators totaled KZT120.33 and KZT120.35 per a dollar. On euro in June deals on KASE were not concluded. The last deal with this currency on KASE was conducted on January 24, 2006, although this sector is available for participants every day. In Russian ruble volume of operations on KASE in June 2007 made 55,800 th. rubles for a total of KZT263.2 m. (in May the volume of transactions totaled 65,300 th. rubles for a total of KZT305.5 m.). Judging on the change of the weighted average exchange rate (May 31, 07 = 4.7090; June 30, 07 = 4.7352), in the analyzed month tenge to ruble had devaluated with average rate 6.77% APR. By opinion of analysts of IRBIS June showed, that measurements, applying by regulators of Kazakhstan market in direction of limitation the borrowing of foreign currency by the banks abroad, have some success. Correction of dollar rate upward, started in the first decade of May exactly as correction and supported by speculative movements of traders, received the expressed development in June. Results of questioning of treasurers of second tier banks (STB) let to consider this movement the objective and in many aspects conditioned by the last actions of Agency of Republic of Kazakhstan for regulating and supervision over financial market and organizations (AFS). It should be noted that it may be judged about effectiveness of measurements of Kazakhstan regulators only in autumn. Previous two years had also fixed the extreme interest of our banks to purchasing of dollars on internal market in summer. However after finishing of the period of vacations banks again were entering the international market with big loans, which had lead to development of long-term tendency of tenge's strengthening to dollar. From that comes the supposition that increased demand for American currency inside the country in summer is the season event. Somehow or other, but pressure on dollar rate from down in the analyzed month had to some extent increased the expectations of IRBIS. It had formed the stable price channel of increasing trend, formed by speculators in the beginning of May, which was able to lead the market even to turning figure. However such development of events, most likely, was not suitable for head bank of the country, who preferred to the further growth of dollar arte the satisfaction of demand of STB for American currency at the expense of gold reserves. It was done in the last decade of June, and it was made so definitely, that it is hardly appropriate to call the given regulation as the evening-out of fluctuations of rate. Either National bank was interested in significant stripping of market for excess tenge by way of selling the currency, or was holding to some appeared reference points of rates, it is hard to say. But due to its actions, market had demonstrated the record turnover of operations (banks were closing the long positions very unwillingly, buying dollar in very big volumes) and was pulled down from ascending price channel. The seriousness of interest of STB to dollar is confirmed by two facts of June - pertinacity with which traders were pushing the price of dollar upward; stabilization (but not fall) of market near 121.80 after finishing of regulator's influence on it. Judging by first numbers of July in this month market will try to consolidate in enough wide subhorizontal channel between 121.00 and 122.00 and volume of operations will yield to June's. [2007-07-11]