ANALYSIS: In July 2007 corporate bonds market showed a marked orientaion on prices fall

16.08.07 22:02
/IRBIS, Natalya Khoroshevskaya, Andrey Tsalyuk, August 16, 07/ - In July 2007 on Kazakhstan stock exchange (KASE) 239 deals were made with corporate bonds in all sectors of the market, including deals, performed on the special trading floor of the Regional financial center of Almaty (STF RFCA) for a total of KZT32,857.3 m. or USD267.4 m. at the current rate effective on deals concluding dates. The stated amount is 33.9% of monthly turnover of corporate securities market (in June 2007 - 16.9%) and 1.0% of monthly exchange turnover (1.7%). Statistic characteristic of corporate bonds market on KASE in June and July of 2007 (indicators are given taking into account direct deals) --------------------------------------------------------------------------- Month: ------------------- --------- --------- Trend July July 2007 2007 June compared to Indicator 2007 Feb 2007 ------------------------------------------- --------- --------- ----------- Trades volume, th., USD 267,377.0 597,183.4 -55.2% Trades volume, m., KZT 32,857.3 72,680.3 -54.8% including, on offerings, th. USD 62,021.0 8.3 +749,919.5% including, on offerings, m. KZT 7,638.5 1.0 +763,750.1% including, on STF RFCA, th. USD 253.7 343,737.8 -99.9% including, on STF RFCA, m. KZT 30.9 41,860.5 -99.9% Number of deals 239 229 +4.4% Number of instruments, 60 71 -15.5% involved in deals Stake of nego deals (number), % 1.7 1.3 +0.4pp Stake of nego deals (volume), % 0.6 0.3 +0.3pp Participation of pension assets, % gross 11.9 3.4 +8.5pp Participation of physical entities, % gross 10.5 1.1 +9.4pp Number of exchange's members, 34 33 +3.0% who made deals Market concentration, %* 62.3 82.6 -20.3pp --------------------------------------------------------------------------- *it is specified the percentage out of total turnover of corporate bonds, which are numbered by the most traded securities (their quantity is 5% out of the total quantity of titles of corporate bonds, included in trading list of KASE) While explaining the considerable fall of stock market of corporate bonds in the analyzed month, it is good to remember that, on June 12, a series of big deals with bonds of Astana-Finance JSC was concluded STF of RFCA to the sum of KZT41.8 bn. or $343.0 m. (57% of the market turnover). The IRBIS analysts had an impression that the mentioned series had a goal of statistical improvement of STF of RFCA, and also the aim of catching more attention to securities on this floor; which would subsequently allow applying the tax preferences of RFCA to those operations. Nothing like that was happening on KASE in July. As a result, the bonds turnover returned to the level of April and May. July showed that the liquidity of exchange market of corporate bonds continues decreasing. The only positive fact in this subject is volumetric offering of next bonds of Daughter mortgage organization of Bank TuranAlem joint stock company, BTA Ipoteka. Within this action, the issuer achieved to borrow 3.4 times more money than it was borrowed on all special trades on corporate bonds offerings, that had been held in the KASE's trading system since the beginning of the year. Therefore, it is not possible to speak about liquidity here. New causes of the liquidity problems on the primary and secondary corporate bonds markets of Kazakhstan in 2007 should be added; these are reasons related to the, so called, world credit crisis. More and more investment objects, that look even more attractive than Kazakhstan issuers' bonds and have better investment features, get the impact of the crisis on the world market. That leads to a flow-out of money of the local investors on the world markets and has negatively influences liquidity of debt instruments of Kazakhstan issuers. The price background of exchange market of corporate bonds in May is characterized by he next statistics. Out of 60 bonds denominations, involved in deals at the secondary market, 42 denominations were traded lower than the nominal value; 17 were traded with premium. Deals on ORDKb1 were made at face value. ATFBe2 looked like the most over-purchased; its weighted average price totaled 117.51%, NRBNb5 and ASFIb12 looked the most oversold (89.32% and 86.69% respectively). In June deals at the secondary market were carried out with bonds of 71 denominations, securities of 39 denominations were traded with discount, 30 - with premium, 1 security - at face value. KKGBb2 looked most overpurchased (119.14%), most oversold - BTASb7 (83.78%). The weighted average net price of corporate bonds at the secondary market in July decreased down to 93.24% from 100.10% in June. In July the yield to maturity on concluded deals increased for a buyer of 31 corporate bonds, and decreased for 19 corporate bonds. There was nothing to compare with the yield of ten securities. In June the corresponding indicators showed 32, 33 and 4. The given data prove that the market of corporate bonds of July showed a marked orientation on prices fall compared to the market of previous months. Tables, which additionally characterize the exchange market of corporate bonds in July, are given below. Change of lists of corporate bonds, traded on KASE, in July 2007 --------------------------------------------------- Bonds: Issuers: ------------ Instruments ------------ Category of ------ ----- ------ ----- admission number trend number trend number trend ------------ ------ ----- ------ ----- ------ ----- A 192 +2 192 +2 61 0 B 24 +2 24 +2 24 +2 ------------ ------ ----- ------ ----- ------ ----- A+B 216 +4 216 +4 85 +2 ------------ ------ ----- ------ ----- ------ ----- C (STF RFCA) 49 0 49 0 14 0 A+B+C 216 +4 265 +4 85 +2 --------------------------------------------------- Notes: "A", "B" - categories of the official list of KASE; "C" - category of the official list of STF RFCA in connection with launch of STF RFCA for the security (bond) of one denomination, two exchange instruments, differing with the code, with conditions of trades holding and payment making, can go with. Main indicators of KASE's corporate bond market in July 2007 ----------------------------------------------------------------- Market. value of Index Volume of Volume of debt, KASE_BY, Index Index deals, deals, Date USD m. % APR KASE_BP KASE_BC th. USD m. KZT ----------- -------- -------- ------- ------- --------- --------- June 29,07 13375.2 8.16 209.36 129.87 32369.8 3959.1 July 2, 07 13,458.3 7.97 210.20 130.91 932.8 113.6 July 3, 07 13,448.9 8.02 209.64 130.47 514.9 62.8 July 4, 07 13,458.4 8.02 209.73 130.49 9,284.3 1,130.1 July 5, 07 13,445.5 8.00 210.08 130.67 180.2 22.0 July 6, 07 13,449.4 8.00 210.19 130.70 62.7 7.6 July 9, 07 13,444.7 8.02 210.09 130.55 28.8 3.5 July 10, 07 13,449.8 8.03 210.02 130.47 1,573.8 191.7 July 11, 07 13,501.8 8.03 210.02 130.44 369.4 44.8 July 12, 07 13,422.8 8.17 209.16 129.83 351.3 42.7 July 13, 07 13,610.1 7.66 212.61 132.09 5,411.4 660.1 July 16, 07 13,610.8 8.03 210.62 130.70 0 0 July 17, 07 13,632.4 8.03 210.59 130.64 4,738.9 576.6 July 18, 07 13,622.3 8.04 210.58 130.61 5,729.7 698.0 July 19, 07 13,606.8 7.88 211.75 131.37 5,614.7 685.4 July 20, 07 13,611.5 8.05 210.69 130.61 8,470.7 1,033.7 July 23, 07 13,611.9 8.07 210.67 130.53 3,975.4 485.0 July 24, 07 13,389.1 8.25 209.41 129.65 14,884.8 1,824.7 July 25, 07 13,403.0 8.04 211.00 130.70 1,891.7 231.4 July 26, 07 13,454.8 8.06 210.86 130.58 16,638.2 2,042.7 July 27, 07 13,581.9 7.67 213.30 132.20 173,852.5 21,411.7 July 30, 07 13,559.6 8.06 211.22 130.71 10,325.3 1,276.3 July 31, 07 13,563.2 8.08 211.11 130.61 948.4 117.2 ----------- -------- -------- ------- ------- --------- --------- Trend +188.0 -0.1 +1.7 +0.7 ,% +1.4 -1.0 +0.8 +0.6 ----------------------------------------------------------------- Summary data on the results of bond trades on KASE in July 2007 (purchase and sale, including offerings, without consideration of nego deals) ------------------------------------------------------------------ Yield to maturity for a buyer, % APR: -------------------------------------- Code ----- ----- -------------- ----------- Volume on for last the last deal: 365 days -------------- ----------- of bond ----- -------- ----- ----- of deals, Number on KASE min. max. yield trend, % min. max. th. USD of deals -------- ----- ----- ----- -------- ----- ----- --------- -------- aHSBKb10 7.80 7.80 7.80 7.80 7.80 35.5 1 aHSBKb11 7.85 7.85 7.85 7.85 7.85 35.2 1 aHSBKb3 7.22 7.22 7.22 7.22 7.22 37.4 1 aHSBKb4 8.65 8.65 8.65 8.65 8.65 37.3 1 aHSBKb7 8.50 8.50 8.50 8.50 8.50 34.2 1 aHSBKb8 7.70 7.70 7.70 7.70 7.70 39.8 1 aHSBKb9 7.70 7.70 7.70 7.70 7.70 34.4 1 ASBNb1 10.20 10.20 10.20 +0.19 9.00 12.00 4.4 1 ASBNb4 11.00 14.00 14.00 +5.50 8.10 14.00 105.1 7 ASBNb5 11.00 13.00 13.00 +4.50 8.00 13.00 60.3 4 ASBNb6 8.70 8.70 8.70 8.49 9.53 3.2 1 ASELb1 13.00 13.00 13.00 0 13.00 13.00 502.6 7 ASFIb12 9.00 9.90 9.00 0 9.00 9.90 12,873.6 6 ASFIb3 8.60 8.60 8.60 8.10 8.60 243.8 1 ASFIb5 10.00 10.00 10.00 -1.81 8.83 11.81 1,864.3 2 ASFIb7 11.00 11.00 11.00 0 8.50 11.00 33.1 1 ASFIb9 9.10 9.40 9.40 7.50 10.00 2,423.2 4 ATFBb3 6.85 8.00 8.00 6.10 8.70 114.3 3 ATFBb4 8.20 8.27 8.20 +0.10 7.00 8.27 143.8 2 ATFBb5 8.70 10.01 9.00 +0.35 7.75 10.01 5,541.4 13 ATFBb6 8.49 9.00 9.00 +0.50 8.49 9.00 2,060.0 2 ATFBe2 1.29 1.29 1.29 1.29 1.29 59.4 1 ATFBe4 4.54 4.54 4.54 4.54 4.54 112.4 1 BTAIb14 7.30 10.00 10.00 +1.00 7.30 10.00 102,132.4 17 BTAIb8 10.50 11.00 11.00 8.50 11.00 277.5 4 BTASb1 11.00 11.00 11.00 0 9.00 11.50 31.9 1 BTASb3 10.00 10.00 10.00 -0.18 7.50 10.91 3,069.1 2 BTASb4 11.10 11.10 11.10 +1.66 7.00 11.10 431.0 1 BTASb5 8.50 8.50 8.50 7.40 8.50 38.6 2 BTASb7 7.00 8.52 7.00 -1.52 7.00 8.60 7,020.9 10 BTLZb1 7.73 7.73 7.73 7.73 8.20 39.0 1 CCBNb15 9.20 9.20 9.20 0 9.20 9.20 8,260.6 1 CSBNb6 9.11 11.25 9.11 8.50 11.25 5,133.2 4 DNTLb1 12.00 12.30 12.00 -0.30 12.00 12.30 368.2 7 DTJLb1 9.50 9.50 9.50 8.04 9.50 12,866.8 3 EKTNb1 11.50 11.50 11.50 11.50 11.50 100.5 1 HSBKb10 7.80 7.80 7.80 6.80 8.46 35.5 1 HSBKb7 8.75 9.00 9.00 +0.25 7.00 9.50 28.7 3 KASTb2 10.00 10.06 10.06 8.40 10.70 132.5 3 KATRb1 11.50 11.50 11.50 0 10.00 13.00 444.8 6 KAZIb1 11.00 11.00 11.00 0 10.00 11.13 76.1 1 KAZIb2 10.50 10.50 10.50 0 10.10 10.50 193.6 6 KDTSb1 9.50 9.50 9.50 -1.43 9.50 10.93 42.2 1 KZASb2 8.70 8.70 8.70 0 8.00 8.90 133.6 3 KZIKb7 7.50 9.50 8.25 +1.05 7.00 9.50 181.8 9 KZNHb2 11.50 11.50 11.50 0 9.50 13.50 578.1 9 KZTCb1 9.00 13.00 13.00 +4.68 8.20 13.50 220.7 16 NFBNb1 10.65 13.50 13.50 10.00 14.00 276.9 12 NRBNb5 9.30 9.30 9.30 -0.20 8.30 9.50 1,763.4 1 ORDBb2 11.80 12.00 12.00 -0.01 10.00 13.50 2,046.3 6 ORDKb1 12.00 12.00 12.00 0 12.00 13.00 4.0 1 RGBRb4 9.00 9.00 9.00 +1.00 8.00 9.20 1,638.8 4 TEBNb12 8.50 11.00 8.50 8.50 11.00 12,063.9 6 TSBNb3 9.00 12.00 9.50 0 9.00 12.00 1,313.5 9 TSBNb4 9.00 9.50 9.00 8.50 10.20 2,867.0 3 TSBNb7 8.50 8.50 8.50 8.50 8.50 11,146.2 2 TSSMb1 10.70 10.70 10.70 8.88 10.70 244.6 2 TXBNb2 10.00 10.00 10.00 +0.51 8.70 11.00 21.7 2 UKPFb1 13.50 13.50 13.50 0 9.99 13.50 95.6 1 VITAb5 9.85 10.60 10.60 +1.01 9.12 11.40 2,041.2 7 -------- ----- ----- ----- -------- ----- ----- --------- -------- 60 203,759.0 231 ------------------------------------------------------------------ Comments: Securities were sorted in alphabetical order according to codes of bonds. Trends are given in percentage points (1pp = 100 basis points) relative to the last deal of previous month - June 2007. In the code of bond by the number is noted the number of bonds' issue. In case of number absence (old quotation) is meant the first emission. The full list of codes of issuers is available at http://www.kase.kz/instruments/nzb_code.htm. [2007-08-16]