ANALYSIS: In May 2008 GS secondary market was inactive

/IRBIS, Ruslan Dzubaylo, June 24, 08/ - In May 2008 on Kazakhstan Stock Exchange (KASE) 130 deals were registered in government securities (GS) purchase and sale sector, including offering for the total of KZT40,868.0 m. (equivalent of $339.0 m.), that was 1.8% out of total exchange's turnover of the month (in April - 3.0%). Relative to April 2008 the sector's turnover decreased by 2.1 times in tenge and dollar expressions. Relative to May 2007 it decreased by 2 times in tenge and dollar expressions. In the primary market sector Ministry of Finance carried out three auctions on the offering of MEKAM. May 14 special trades for offering of government mid-term treasury instruments of Ministry of finance of Kazakhstan republic MEOKAM-24 of 71st issue (KZK2KY020719, MOM024_0071; KZT1,000, 14.05.08 - 14.05.10, 30/360) were held in KASE's trade system. Coupon rate was the subject of the trade. Initially, KZT10,000.0 m. was planned to borrow. 14 primary dealers participated in the trades, having submitted 20 limited bids. Total volume of active bids (volume of ask) made KZT13,989.0 m.(139.9% from suggested volume of bonds). The yield on ask varied from 8.35 % APR to 16.00 % APR, making in average weighted expression 11.92 % APR. By results of trade, the issuer made cut off price at 8.50% rate and satisfied bids on purchasing of 3,889,000 bonds on sum KZT3,889,000,000.00, what made 38.9% from planned volume of bonds. At that, 15.0 % from the total number of placed bonds were re-purchased by the subjects of pension market, 10.3 % - by SLB, 61.7% - by SLB clients, 12.9 % - brokerage and dealers organizations and 0.1 % - by their clients. May 21 in the Exchange trading system was held the auction on placement of government short-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan MEKKAM-12 (KZK1KY010885, MKM012_0088; KZT100, 29.04.08 - 29.04.15, 30/360). Bonds` price was the subject of the trade. Initially, KZT14,000.0 m. was planned to borrow. 17 primary dealers participated in the trades, having submitted 34 limited bids. Total volume of active bids (volume of ask) made KZT41,790.9 m.(327.5% from suggested volume of bonds). The yield on ask varied from 7.2731 % APR to 18.0000 % APR, making in average weighted expression 9.7225% APR. By results of trade, the issuer made cut off price at 92.9541% rate and satisfied bids on sum KZT13,696.1 m., (what made 105.1% from suggested volume of bonds). April 23 specialized trades on offering of government long-term treasury obligations of Ministry of finance of Republic of Kazakhstan MEUKAM-120 (KZKAKY100048, MUJ120_0004; KZT1,000, 29.05.08 - 29.05.18, 30/360).was held in KASE's trade system. Fixed coupon rate was the subject of the trade. Initially, 10,000,000 bonds were planned to offer. 10 primary dealers participated in the trades, having submitted 23 limited bids. Total volume of active bids (volume of ask) made KZT22,500.0 m.(330.1% from suggested volume of bonds). The rate of fixed coupon varied from 0.01 % to 1.00 %, making in average weighted expression 0.07 %. By results of trade, the issuer made cut off price at 0.01% rate and satisfied bids on sum KZT13,000.0 m., what made 130.0% from planned volume of bonds. The forecast yield to maturity made 19.14% APR. In May TONIA index was very low, what said about surplus liquidity in Kazakhstan economic. And it is not a surprise: exporters managed to accumulate enough recourses from export of got up oil; and sharply and unexpectedly changed balance of current operations testifies on accumulation of surplus currency inside the country. Surplus money, accumulate on the accounts of SLB were offered by the participants in returned repo operations in notes of National Bank. As a result, offering volume of National Bank in May was record in 2008($36.8 bn.). No wander that all traders` attention was fixed on GS initial market. Secondary market remained inactive. Statistical indicators of GS secondary market in May and the structure of turnover are given in the table (in parentheses - comparative indicators of the previous month). -------------------------------------------------------------------------------- Yield to maturity for the buyer, %APR Term ---------------------------------- Volume, m. KZT Number till maturity min max last WA at market price of deals --------------- ----- ----- ----- ------------- ----------------- -------- Discounted GS (KZT): MEKKAM, National Bank's notes - 10.5% (85.7%) of the market -------------------------------------------------------------------------------- less 8 8.02 8.02 8.02 8.02 (6.61) 50.0 2 8 - 14 7.00 8.65 7.00 7.04 (9.97) 51.0 2 15 - 28 5.89 8.00 5.89 6.44 (6.47) 270.9 3 64 - 91 7.20 7.20 7.20 7.20 (- ) 25.6 1 182 - 364 7.42 7.43 7.42 7.42 (- ) 681.8 3 --------------- ----- ----- ----- ------------- ----------------- -------- Total 1079.2(45946.8) 11(45) --------------- ----- ----- ----- ------------- ----------------- -------- Coupon GS (KZT): MEOKAM, MUIKAM - 89.5% (14.3%) of the market -------------------------------------------------------------------------------- less than 730 8.00 9.50 8.00 8.42,(9.10) 4,460.31 42 731 - 1095 8.00 8.25 8.00 8.17,(8.23) 592.86 9 1096 - 1460 8.00 8.68 8.68 8.49,(3.00) 150.18 2 1826 - 2191 11.19 18.95 11.19 18.03,(11.60) 1,386.62 4 More than 2191 16.87 18.94 17.22 17.66,(14.55) 2,613.66 19 --------------- ----- ----- ----- ------------- ----------------- -------- Total 9203.6(7685.9) 76(58) --------------- ----- ----- ----- ------------- ----------------- -------- GRANDTOTAL 10282.9(53632.80) 87(103) -------------------------------------------------------------------------------- The stake of exchange's turnover in total volume of purchase and sale deals of Kazakhstan GS secondary market in May made 87.7% (in April - 91.4%).r [2008-06-24]