ANALYSIS: In October 2007 activity of GS market on KASE decreased significantly

/IRBIS, Ruslan Dzyubaylo, November 12, 07/ - In October of 2007 on Kazakhstan stock exchange (KASE) in GS purchase and sale sector 99 deals for a total of KZT35,221.5 m. are registered (equivalent to 291.6 m. US dollar), which amounted 1.1% of the total exchange turnover of the month (in September - 2.3%). Relative to October of 2007, the turnover of the sector decreased by 56.6% in tenge and by 55.3% in dollar terms; relative to October 2006, it increased by 43.2% in tenge and by 40.0% dollar terms. In sector of primary market the Finance ministry conducted two auctions to offer MEKAM. On October 23, by specialized trades method was conducted the auction for offering of governmental short-term discount treasury liabilities of Ministry of finance MEKKAM-12 of the 85th issue (KZK1KM120851, MKM012_0085; KZT100, KZT10.0 bn; October 23, 07 - October 23, 08, annual/actual). Total volume of active bids reached KZT24,266.9 m. which made 269.2 % of the offered volume and price varied, according to demand, from 86.2069 % (16.00 % APR) to 93.4579 % (7.00% APR) By results of trades, the issuer made cut-off at the price of demand at 90.6618 % (7.00% APR) and satisfied bids for purchases of 184,227,000 bonds to the sum of KZT16,856,470,960.00, offering by that 184.2% of announced volume. Thus, prices of the satisfied bids varied from 90.6618 % (7.00 % APR) to 93.4579 (10.30 % APR), having totaled 91.4984 % (9.29 % APR) in the weighted average expression. 12.5% of bonds were purchased at the expense of assets of one of the pension funds, 43.4% were bought by STB, and 43.4% - by STB' clients, and 0.7% - by brokerage and dealership organizations. All deals were executed. On October 30, 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-120 (KZKAKY100030, MUJ120_0003, KZT1,000, October 30, 07 - October 30, 17, 30/360). Fixed coupon was the subject of trades. Initially it was planned to borrow KZT14,000.0 m. Nine primary dealers participated in trades, who had submitted 31 limited bids. Total volume of these bids (volume of demand) made KZT21,910.0 m. (156.5% of the offered volume of bonds). Rate of fixed coupon varied from 0.50% APR to 5.00% APR, having totaled 3.26% in weighted average terms. By results of trades rate of fixed coupon was set at the level 1.00% APR, bids were satisfied for KZT2,010.0 m. (14.4% from planned volume of offering). Forecasted yield to maturity of offered bonds was estimated at the level of 12.34 % APR with circulation term of bonds for ten years. On secondary market sector a considerable decrease of activity occurred against the background of increase in yield of the majority of instruments. Thus, the weighted average yield of notes of the National Banks grew up to 9.22% in October from 4.51% as of the beginning of the year. The increase in yield and reduction of turnover on the secondary market was related first to the events on primary market. Point is that during October Ministry of finance behaved much more "pliable", having significantly increased yield while offering its bonds. At that, the weighted average yield of offerings in October totaled 11.78%, while during nine months since the beginning of the current year this figure had not exceeded 8.15%. Similar was the behavior of the National bank who increased the yield of its 28-day notes in October up to 5.50% APR. Statistic indicators of Kazakhstan GS purchase and sale sector in September 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, MEKKAM - 56.7% (96.7%) of the market ------------------------------------------------------------------------------- less than 8 11.00 11.00 11.00 11.00 (9.00) 99.9 1 8 - 14 10.00 10.00 10.00 10.90 (5.90) 99.7 1 15 - 28 2.00 2.00 2.00 2.00 (9.52) 199.7 1 64 - 91 9.00 11.25 9.00 9.00 ( -) 7 397.0 11 182 - 364 8.00 9.36 8.32 9.31 (5.87) 1 475.4 7 ------------ ------ ------ ------ ------------- ---------------- -------- Subtotal 9271.8(50504.0) 21(128) ------------ ------ ------ ------ ------------- ---------------- -------- Coupon GS (KZT): MEOKAM - 43.3% (3.3%) of the market ------------------------------------------------------------------------------- 731 - 1095 6.30 8.75 6.50 7.02 (6.28) 6 592.0 47 1096 - 1460 6.25 6.25 6.25 6.25 ( -) 491.3 1 ------------ ------ ------ ------ ------------- ---------------- -------- Subtotal 7083.3(1731.0) 48(13) ------------ ------ ------ ------ ------------- ---------------- -------- TOTAL 16355.1(52235.0) 69(141) ------------------------------------------------------------------------------- Exchange turnover share in total volume of purchase and sale deals of Kazakhstan GS secondary market in October decreased to 47.2% (in September it was 61.8%). [2007-11-12]