Complete results of placing of MEKAVM #17/3B

/IRBIS, Sep.15, 99/ - September 14 the Ministry of Finance of Kazakhstan and the National Bank has conducted 23rd auction for MEKAVM-3 (91 days) placement Announced volume of issue was determined by the emitter at $3 million. Satisfaction size of the incompetitive applications - 50 % from established volume. The complete data and comparison with the previous comparable transh are given below. Type of securities MEKAVM -3 MEKAVM -3 NSIN KZ43L1612993 KZ43L0912998 Trade code at KASE МВМ003.023 МВМ003.022 IRBIS' registration number 23/3B 22/3B Nominal value, USD 100.00 100.00 Date of issue Aug.14, 99 Aug.07, 99 Beginning of the circulation Aug.16, 99 Aug.09, 99 Date of redemption Dec.16, 99 Dec.09, 99 Maturity 91 days 91 days Number of the Primary dealers 8 (- 2) Demand, million USD 7.4 (- 9.1) Yield on demand weighted average, % p.a. 9.58 (+ 0.79) Scheduled volume, million USD 3.0 (0) Actual volume, million USD 5.4 (- 8.9) The cutting off price, USD 97.94 (0) The weighted average price, USD 97.94 (0) Maximum yield, % p.a. 8.41 (0) Weighted average yield., % p.a. 8.41 (0) Weighted average yield., effective, % p.a. 8.68 (0) The yield is expressed in a currency form. According to the information of the Ministry of Finance, no applications were received from non-residents for the auction. Sharp fall of demand for MEKAVM-3 and cancellation of two last МЕККАМ-3 issues, in opinion of IRBIS analysts is indicative. The trust to the securities of Ministry of Finance falls. It could be assumed that the great demand at the previous MEKAVM-3 issue placement was stipulated by the buying up of these securities by the National Bank or by the State Pension Founds, and at this time these connected with the Ministry of Finance structures, did not participate in auction. However result of the analysis testifies to the ordinary degree of monopolisation of the purchasing of 22nd issue. Only 55.1% of issue was bought by one participant, and 75.2% - by two. Total 11 investors bought MEKAVM-3.The indicated parameters are usual. Even the end of a quarter (there are only two auction left) did not help to the emitter. (Each of Primary Dealers should spent not less than 200 million tenges for the bonds acquisition) Today Some Pension Assets Management Companies (PAMC) sell out the Euronotes of Kazakhstan having yield 10% p.a. in hard currency, and than spent obtained money for buying of the less profitable securities of the foreign emitters. This fact also confirms decrease of trust to State Securities of the Ministry of Finance. Apparently, investors are afraid of the Ministry's default. This expectation could be stipulated by results of negotiations with IMF, and by non-official negative information concerning the third transh of the Kazakhstan Euronotes placement. As far as it is known to IRBIS, lead managers have confronted now with some problems. The history with "MIG" aeroplanes has forced west countries to look at Kazakhstan differently, and the new view has not become better. It is necessary to note, also, that despite of double decrease of demand at the MEKAVM placement, volume of applications remains large. The reason is high devaluation expectations of the market participants, which try to insure the exchange risks. The Ministry of Finance has ended the 38th week with the following results. At a scheduled volume of the placement of $3,0 millions and KZT 400,0 million (equivalent in tenge at the rate on date of an attraction - 805.3 million) the emitter has attracted $5.9 million (equivalent in tenge at an official rate on Sep.15, 99 - 802.5 million), whereas actual volume of redemption has made $2.7 million (359.9 million tenge at an official rate at Sep.15, 99). Balance net - drawing on results of week positive.