ANALYSIS: In August 2008 GS secondary market activated on Kazakhstan stock market price fall

/IRBIS, Ruslan Dzubaylo, September 26, 08/ - In August 2008 on Kazakhstan Stock Exchange (KASE) 193 deals were registered in government securities (GS) purchase and sale sector, including offering for the total of KZT84,552.7 m. (equivalent of $704.8 m.), that was 2.0 % out of total exchange's turnover of the month (in July - 1.4 %). Relative to July 2008 the sector's turnover increased by 2.1 %. Relative to August 2007 it decreased by 2.2 % in tenge and 2.1 % in dollar expressions. In August Ministry of Finance carried out five auctions, during which offered record KZT45.1 bn. bonds. August 6 was held the the first in August auction on placement of government short-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan MEKKAM-6 of 182nd issue (KZK1KM061824, MKM006_0182; KZT100; 06.08.08 - 06.02.09, actual/actual). Bond's price was the subject of the trade. Initially KZT5.0 bn. was planned to borrow. 6 primary dealers participated in the trades, having submitted 11 limited bids. Total volume of active bids (volume of demand) made KZT24,664.0 m. (510.9 % from the suggested volume). The yield varied from 6.60 % APR to 7.50 APR, making in average weighted expression 7.0705 % APR. By results of trade, the issuer made cut off price at 96.6386 % (6.8999 %APR), having satisfied bids on KZT4 836.3 m. (100.0 % from the suggested volume of bonds). August 13 auction on offering government mid-term treasury obligations of Ministry of finance of Kazakhstan republic MEOKAM-24 of 73rd issue (KZK2KY020735, MOM024_0073; KZT1 000, 13.08.08 - 13.08.10, 30/360) were held in KASE's trade system. Coupon rate was the subject of the trade. Initially, KZT7,000.0 m. was planned to borrow. 6 primary dealers participated in the trades, having submitted 12 active bids. Total volume of active bids (volume of demand) made KZT11,070.0 m.(158.1% from suggested volume of bonds). The yield varied from 7.95 % APR to 9.50 % APR, making in average weighted expression 8.10 % APR. By results of trade, the issuer set the rate of coupon at 8.00% APR and satisfied bids on sum KZT7,000.0 m.(100.0 % from the suggested volume of bonds). August 20 was held the regular auction on offering government mid-term treasury obligations of Ministry of finance of Kazakhstan republic MEOKAM- 36 of 66th issue (KZK2KY030668, MOM036_0066; KZT1 000, 20.08.08 - 20.08.11, 30/360) were held in KASE's trade system. Bonds` coupon rate was the subject of the trade. Initially, KZT9,000.0 m. was planned to borrow. 14 primary dealers participated in the trades, having submitted 31 limited bids. Total volume of active bids (volume of demand) made KZT24,623.0 m.(273.6% from suggested volume of bonds). The yield varied from 8.00 % APR to 11.00 % APR, making in average weighted expression 8.69 % APR. By results of trade, the issuer set coupon rate at 8.50 % APR, having satisfied bids at KZT9 000.0 m. (100.0 % from the suggested volume of bonds). August 26 repeated auction on offering government mid-term treasury obligations of Ministry of finance of Kazakhstan republic MEOKAM-24 of 73rd issue (KZK2KY020735, MOM024_0073; KZT1 000, 13.08.08 - 13.08.10, 30/360) were held in KASE's trade system. Bonds` net price was the subject of the trade. Initially, KZT5,000.0 m. was planned to borrow. 6 primary dealers participated in the trades, having submitted 13 limited bids. Total volume of active bids (volume of demand) made KZT18,000.0 m.(360.0% from suggested volume of bonds). The yield varied from 8.00 % APR to 8.50 % APR, making in average weighted expression 8.1680 % APR. By results of trade, the issuer set coupon rate at 8.00 %APR, having satisfied bids at KZT13 333.3 m. (266.7 % from the suggested volume of bonds). August 20 repeated auction on offering government mid-term treasury obligations of Ministry of finance of Kazakhstan republic MEOKAM-36 of 66th issue (KZK2KY030668, MOM036_0066; KZT1 000, 20.08.08 - 20.08.11, 30/360) were held in KASE's trade system. Bonds` net price was the subject of the trade. Initially, KZT5,000.0 m. was planned to borrow. 16 primary dealers participated in the trades, having submitted 26 limited bids. Total volume of active bids (volume of demand) made KZT27,726.0 m.(555.4% from suggested volume of bonds). The yield varied from 8.49 % APR to 9.00 % APR, making in average weighted expression 8.6234 % APR. By results of trade, the issuer set coupon rate at 8.4950 %APR, having satisfied bids at KZT10 919.2 m. (218.4 % from the suggested volume of bonds). After the primary market, secondary activated. Note that interest of participants to longer, but not profitable securities of Ministry of Finance. From one hand, it can be explained by increased issuing activity of the last one in August, on the other hand, - so called "escape in quality", when investors alarmed by unprecedented fall of Kazakhstan and world market prefer to invest in risk-free instruments, notwithstanding their negative actual yield. Confirmation of increased demand on such securities is increased activity on long securities of Ministry of Finance and decrease of weighted average yield on them (see table below). Statistical indicators of GS secondary market in August 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 - 16.4% (41.5%) of the market ------------------------------------------------------------------------ less 8 6.50 6.50 6.50 6.50 (4.00) 299.8 1 15 - 28 5.76 5.76 5.76 5.76 (5.76) 996.1 2 64 - 91 6.08 6.15 6.15 6.14 (6.15) 4,742.5 4 182 - 364 7.89 7.89 7.89 7.89 (7.30) 431.8 1 -------------- ----- ----- ----- ------------- ---------------- -------- Total 6470.2(6840.4) 8(14) -------------- ----- ----- ----- ------------- ---------------- -------- Coupon GS (KZT): MEOKAM, MEUJKAM, MUIKAM, MEUKAM - 83.6% (58.5%) of the market ------------------------------------------------------------------------ less than 730 6.63 10.31 6.63 8.32 (8.27) 2,165.8 14 731 - 1095 7.70 8.83 8.47 8.19 (8.96) 9,777.0 48 1461 - 1825 5.50 14.50 5.50 13.42 (19.01) 232.2 2 1826 - 2190 5.50 17.88 17.66 11.76 (8.94) 7,830.6 24 More than 2191 5.50 19.96 5.50 9.66 (17.89) 12,950.1 44 -------------- ----- ----- ----- ------------- ---------------- -------- Total 32955.8(9638.5) 132(48) -------------- ----- ----- ----- ------------- ---------------- -------- GRANDTOTAL 39426.0(16478.9) 140(72) ------------------------------------------------------------------------ The stake of exchange's turnover in total volume of purchase and sale deals of Kazakhstan GS secondary market in August made 75.3% (in July - 71.3 %).r [2008-09-26]