ANALYSIS: In October 2008 interest to GS market remains high

/IRBIS, Valeriy Khegay, November 26, 08/ - In October 2008 on Kazakhstan Stock Exchange (KASE) 301 deals were registered in government securities (GS) purchase and sale sector, including offering for the total of KZT106,629.1 m. (equivalent of $889.9 m.), that was 2.4 % of the total exchange turnover of the month (in September - 2.2 %). Relative to September 2008 the sector's turnover decreased by 6.3 %. Relative to October 2007 it increased by 3 times. In October the Ministry of Finance carried out seven auctions, one of which was annulled. October 1 auction on offering government mid-term treasury obligations of Ministry of Finance of Republic of Kazakhstan MEOKAM-48 of 36th issue (KZK2KY040360, MOM048_0036; KZT1,000, 01.10.2008 - 01.10.2012, 30/360) was held in the KASE trade system. Coupon rate was the subject of trade. Initially, KZT10,000.0 m. was planned to be borrowed. Six primary dealers participated in the trades, having submitted 17 active bids. Total volume of active bids (volume of demand) made KZT8,411.0 m. at bond face value (84.1% from suggested volume of bonds). The yield varied from 8.45 % APR to 9.50 % APR, making in average weighted expression 9.02 % APR. By results of trade, the issuer set the rate of coupon at 8.55% APR and satisfied bids for the total of KZT1,333.3 m.(13.3 % from the suggested volume of bonds). October 8 auction on offering government mid-term treasury obligations of Ministry of Finance of Republic of Kazakhstan MEOKAM-36 of 68th issue (KZK2KY030684, MOM036_0068; KZT1,000, 08.10.2008 - 08.10.2011, 30/360) was held in the KASE trade system. Coupon rate was the subject of trade. Initially, KZT10,000.0 m. was planned to be borrowed. Six primary dealers participated in the trades, having submitted 13 active bids. The total volume of active bids (volume of demand) made KZT8,048.0 m. at bond face value (80.5% from suggested volume of bonds). The yield varied from 8.30 % APR to 9.00 % APR, making in average weighted expression 8.88 % APR. By results of trade, the issuer set the rate of coupon at 8.40% APR and satisfied bids for the total of KZT1,120.0 m.(11.2 % from the suggested volume of bonds). October 15 auction on placement of government short-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan MEKKAM-6 of 185th issue (KZK1KM061857, MKM006_0185; KZT100; 15.10.2008 - 15.04.2009, actual/actual) was held. Bond price was the subject of trade. Initially KZT10,000.0 m. was planned to be borrowed. Ten primary dealers participated in the trades, having submitted 24 active bids. The total volume of active bids (volume of demand) made KZT16,658.6 m. (172.7 % from the suggested volume). The yield varied from 7.00 % APR to 9.00 APR, making in average weighted expression 7.36 % APR. By results of trade, the issuer cut off the price at 96.6273 % (7.00 %APR), having satisfied bids on KZT10 875.4 m. (112.6 % from the suggested volume of bonds). October 20 auction on placement of government short-term treasury obligations of the Ministry of Finance of the Republic of Kazakhstan MEKKAM-12 of 92nd issue (KZK1KY010927, MKM012_0092; KZT100; 20.10.2008 - 20.10.2009, actual/actual) was held. Bond price was the subject of trade. Initially KZT10,000.0 m. was planned to be borrowed. 5 primary dealers participated in the trades, having submitted 11 active bids. Total volume of active bids (volume of demand) made KZT11,841.3 m. (127.5 % from the suggested volume). The yield varied from 7.50 % APR to 9.00 APR, making in average weighted expression 7.64 % APR. By results of trade, the issuer cut off the price at 93.0233 % (7.50 %APR), having satisfied bids on KZT10 554.4 m. (113.5 % from the suggested volume of bonds). October 29 auction on offering government mid-term treasury obligations of Ministry of Finance of Republic of Kazakhstan MEOKAM-60 of 27th issue (KZK2KY050278, MOM060_0027; KZT1 000, 29.10.2008 - 29.10.2013, 30/360) was held in the KASE trade system. Coupon rate was the subject of trade. Initially, KZT7,000.0 m. was planned to be borrowed. 13 primary dealers participated in the trades, having submitted 47 active bids. The total volume of active bids (volume of demand) made KZT30,342.0 m. at bonds` face value (433.5% from suggested volume of bonds). The yield varied from 7.00 % APR to 11.00 % APR, making in average weighted expression 9.67 % APR. By results of trade, the issuer set the rate of coupon at 8.75% APR and satisfied bids on sum KZT7,290.0 m.(104.1 % from the suggested volume of bonds). October 30 the auction on offering of government long-term savings treasury obligations of the Ministry of Finance of the Republic of Kazakhstan MEUJKAM-120 of 5th issue (KZKAKY100055, MUJ120_0005; KZT1 000, 30.10.2008 - 30.10.2018, 30/360) was held in KASE trade system. Fixed coupon was the subject of trade. Initially, KZT6,000.0 m. was planned to be borrowed. 10 primary dealers participated in the trades, having submitted 31 active bids. Total volume of active bids (volume of demand) made KZT24,748.0 m. at bonds` face value (412.5% from suggested volume of bonds). The rate of fixed coupon in bids varied from 0.01 % APR to 0.15 % APR, making in average weighted expression 0.01 % APR. By results of trade, the issuer set the rate at 0.01 % APR, having satisfied bids at KZT15,000.0 m. (250.0 % from the suggested volume of bonds). GS market in October was still popular. Compared to the previous month, the volume of initial GS market decreased by 19 %, but in the whole remained at rather high level, owing to increased emission activity of the Ministry of Finance. At that yield on concluded deals is not very high. Notwithstanding the hard line of the Ministry of Finance and the National Bank, increased demand on this type of instruments is observed on GS market and actual volume of offerings often exceeds the announced volume. The reason is the absence of little risk financial instruments on the market. At the same time, secondary GS market continued to increase turnovers and in the analyzed month fixed the minimal volume of deals since year beginning. The reason of such interest to GS is the same - instability of Kazakhstan and world financial markets and "escape in quality". Statistical indicators of GS secondary market in October 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 - 49.8% (69.2%) of the market ----------------------------------------------------------------------------- Less than 8 4.91 26.20 5.76 12.57 (- ) 228.0 3 8 - 14 3.00 6.50 3.00 4.17 (4.45) 299.7 3 15 - 28 5.58 7.00 5.76 5.84 (5.86) 640.5 5 64 - 91 6.35 6.35 6.35 6.35 (- ) 53.2 1 92 - 181 5.76 13.00 13.00 7.76 (- ) 17,311.7 47 182 - 364 7.40 13.00 7.55 7.96 (- ) 11,556.6 19 -------------- ------ ------- ------ --------------- --------------- -------- Total 30,089.8 78 (39,247.0) (35) -------------- ------ ------- ------ --------------- --------------- -------- Coupon GS (KZT): MEOKAM, MUIKAM, MEUKAM - 50.2% (30.8%) of the market ----------------------------------------------------------------------------- less than 730 3.00 10.00 8.50 8.23 (6.89) 11,779.4 62 731 - 1095 7.00 9.90 8.45 8.28 (8.27) 7,509.0 44 1461 - 1825 9.84 19.14 9.84 16.08 (15.14) 6,041.7 24 1826 - 2190 5.50 18.59 7.90 7.46 (17.34) 2,768.8 12 More than 2191 5.50 8.20 7.20 6.69 (17.84) 2,267.3 18 -------------- ------ ------- ------ --------------- --------------- -------- Total 30,366.2 160 (17,434.2) (101) -------------- ------ ------- ------ --------------- --------------- -------- GRANDTOTAL 60,455.9 238 (56,681.2) (136) ----------------------------------------------------------------------------- The stake of exchange turnover in total volume of purchase and sale deals of Kazakhstan GS secondary market in October made 95.0% (in September - 89.7 %).r [2008-11-26]