ANALYSIS: In August 2007 activity of GS market on KASE had sudden increased due to redeeming of notes by National Bank

/IRBIS, Dinara Mukasheva, September 17, 07/ - In August of 2007 on Kazakhstan stock exchange (KASE) in GS purchase and sale sector 143 deals for a total of KZT188,170.2 m. are registered (equivalent to 1,498.6 m. US dollar), which amounted 4.8% from the total exchange turnover of the month (in July - 3.1%). Relative to July of 2007, the turnover of the sector increased by 87.5% in tenge and by 82.1% in dollar expression; relative to August 2006, - by 1.8% in tenge and dollar expressions. In sector of primary market the Finance ministry went on KASE with an intention of borrowing in the analyzed month. On August 11, by Ministry of finance was made an attempt of offering the governmental short-term treasury liabilities MEKKAM-3 of 301st issue (KZW1KM033013, MKM003_0301; KZT100, August 8, 07 - November 8, 07, actual/actual). On the specialized trades the Ministry of finance planned to borrow KZT15,000.00 m. Total volume of submitted bids made KZT1,869,548,850.60 (12.5% from offered volume of bonds). Price in limited bids varied from 97.0641% (12.00% APR) to 98.0000% (8.10% APR), making in average weighted expression 97.5246% (10.07% APR). In total volume of demand 47.8% were controlled by bids form one of pension funds of Kazakhstan, 36.5% - by bid from second tier bank, 15.7% - by bid from broker-dealer organization. Studying the parameters of demand, the Ministry of finance considered the auction frustrated "due to unsatisfactory formed price on given bids". On August 15, by specialized trades method was conducted the repeated auction for offering of governmental long-term indexed treasury liabilities of Ministry of finance MUIKAM-72 of the first issue (KZKBKY060019, MUX072_0001; KZT1,000, KZT22.9 bn; June 6, 07 - June 6, 13, annual coupon 0.5% APR + inflation, 30/360) on which ministry of finance was planned at "dirty" price to offer 15.0 m. bonds. Total volume of active bids (volume of demand) had reached KZT5,041,461,200.00 or 34.6% to offered volume. Total volume of active bids had come on the stake of pension market. By results of trades the issuer made cut-off at the price 99.5276% (9.78% APR) and satisfied bids for purchasing of 1,550,000 bonds for amount of KZT1,550,396,600.00, offering by that 10.3% form announced volume. "Dirty" price in satisfied bids varied from 99.5276% (9.78% APR) to 100.6303% (9.53%) and in average weighted expression was euqal to 100.0256% (9.67% APR) at 2,090 days to maturity. All deals were executed. On August 29, in exchange's trade system had taken place the specialized trades for offering of governmental long-term savings treasury liabilities of Ministry of finance MEUJKAM-180 (KZKAKY150043, MUJ180_0004, KZT1,000, August 29, 07 - August 29, 22, 30/360). Fixed coupon was the subject of trades. Initially it was planned to borrow KZT14,000.0 m. 4 primary dealers participated in trades, who had submitted 10 limited bids, which had left active to the time of bids confirmation expired. Total volume of these bids (volume of supply) made KZT3,100.0 m. (22.1% from offered volume of bids). Rate of fixed coupon varied from 1.00% APR to 5.40% APR. By results of trades rate of fixed coupon was set at the level 1.00% APR, bids were satisfied for KZT700.0 m. (5.0% from planned volume of offering). Forecasted yield to maturity of offered bonds was estimated at the level 9.94% APR with circulation term of bonds for 15 years. Events in secondary market sector in August may be conditionally divided to two periods. In the first half of month there was no market - amount of deals did not exceed 14, volume - KZT1,802.23 m. however in the second half of August the situation had sudden changed. The turnover of the market had started to grow rapidly. Striving to increase the tenge liquidity on the market, National bank had started to redeem its noted from banks on KASE's platform, which actually meant their prescheduled maturity. Statistic indicators of Kazakhstan GS purchase and sale sector in July and the structure of the secondary market turnover are given in the table (in parentheses - comparable indicators of previous month). ---------------------------------------------------------------------------------- Yield to maturity for a buyer,% year. Maturity ------------------------------------- Volume, m. term, last weighted tenge in Number days min max deal average market price of deals ----------- ------ ------ ------ ------------- -------------------- -------- Discount GS (KZT): notes of National bank - 99.6% (80.4%) of the market ---------------------------------------------------------------------------------- less than 8 4.80 13.71 4.80 9.18 (5.19) 66,178.5 38 8 - 14 4.80 11.00 4.80 9.73 (5.69) 30,113.5 24 15 - 28 4.70 12.00 4.97 8.39 (4.75) 6,046.9 11 29 - 36 9.00 11.00 9.00 9.11 (4.70) 27,567.4 15 43 - 56 5.91 11.00 6.79 8.43 (5.33) 23,810.8 16 57 - 63 5.41 7.66 7.07 6.89 (5.95) 120.8 3 92 - 181 7.00 8.48 7.50 6.07 (5.54) 29,742.3 16 182 - 364 4.80 13.71 4.80 7.17 (6.03) 1,619.6 5 ----------- ------ ------ ------ ------------- -------------------- -------- Subtotal 185,199.7 (79,838.6) 128 (65) ----------- ------ ------ ------ ------------- -------------------- -------- Coupon GS (KZT): МЕОКАМ, MEUKAM, MUIKAM - 0.4% (19.6%) of the market ---------------------------------------------------------------------------------- 731 - 1095 12.00 12.00 12.00 12.00 (7.52) 3.5 2 1096 - 1460 6.30 6.30 6.30 6.30 (8.50) 279.1 2 1826 - 2190 18.39 18.42 18.39 18.40 (8.87) 437.5 4 ----------- ------ ------ ------ ------------- -------------------- -------- Subtotal 720.1 (11,505.3) 8 (32) ----------- ------ ------ ------ ------------- -------------------- -------- TOTAL 185,919.8 (91,343.9) 136 (97) ---------------------------------------------------------------------------------- Exchange turnover share in total volume of purchase and sale deals of Kazakhstan GS secondary market in August grew to 75.8% (in July it was 32.4%). [2007-09-17]