Week volume of transactions for USD on KASE - $46.520 million (statistics, tendency)

/IRBIS, Sep.24, 99, Elena Korpusenko, Andrey Tsalyuk/ - For US dollar within the thirty ninth week (September 20 - 26) on the Kazakhstan Stock Exchange (KASE) 982 transactions totaling $46.520 million at an average volume of trade session $9.304 million were made. Tenge devaluation calculated at an average weighted market rate, is evaluated for the week by a trend of 121.3% p.a. In the previous week 187 deals totaling $73.600 million at an average volume of session of $14.720 were made. Rate of tenge devaluation has made during this period 22.4% annual. In comparison with the previous week the rate of national currency devaluation has grown 5.5 times. Significant decrease of the day average volume of transactions, in opinion of the IRBIS analysts, is connected mainly with decrease of exporters' dollars supply. The rate of tenge devaluation against US dollar, calculated on the September 24 average weighted market rate, makes 89.7% p.a. on long- term tendency (from a beginning of the year) and 66.8% p.a. on intermediate (last 30 days). For deutsche mark 9 transactions totaling DEM 110,000 were made. The rate of mark increased by 1.9%, that corresponds to week's average rate of tenge devaluation of 96.3% p.a. For Euro 7 deals totaling 60,000 Euro were made. The European currency rate increased by 3.7%, that corresponds to week's average rate of tenge devaluation of 192.1% p.a. Features of the week: daily acceleration of growth of dollar rate, high activity and increasing nervousness of the exchange market, fast growing of the dollar quotations, insignificant supply of the foreign currency earnings by the exporters, rather high price of short money and complete loss of investors' interest to the not indexed State Securities. Also it is necessary to add daily, beginning from Tuesday, fall of trades volumes. Revelation of the week: inefficiency of measures undertaken by the National Bank for stabilization. Usually such measures influence on the market and help to stabilize the USD rate. Results of the week: extremely high, almost agitate devaluation expectations, almost "overheat" market, and expectation of the active, market or administrative, actions of the National Bank. Anything essentially new happened in the market in comparison with the previous period. There are no new factors, which could provoke an additional demand for dollar. The only one new negative - absence of any information about road show results, which was conducted by Kazakhstan in Europe and USA for preparation to placement of the third Euronotes transh. The attempts of the IRBIS to receive the information from the participants, were cancelled by "the Information is confidential". It does not mean, that the issue will not held. But the market is nervous. There are no any comments from the representatives of the authority and the National Bank. It is impossible to speak about increase of demand for dollar in absolute term: volumes of trades have been reduced day-to-day. The fast growth of the dollar rate was stipulated by prevalence of demand over supply, and no more. And obstinacy of the market operators, which are not wishing to transfer free means in the State Securities sector from the currency one, were stipulated only by absolute reliance that dollar will grow. Therefore observed situation is caused in the greater degree by the psychological factors, rather than economic. But the action of the psychological factors occurs in beneficial situation: for a long time market was saturated with tenge, which could not be claimed by the real economy. Therefore, the 1.5 times increase of the money supply from the end of June has resulted only in growth of the National Bank foreign exchange reserves, and has not caused (and could not cause) neither a real decrease of the percentage rates, nor desire to credit the industry, nor decrease of the devaluation expectations. Occurring is the result, natural and expected by the market participants, of the financial policy carried out during last 1.5 months. "Bomb", about which the dealers spoke in middle of July, has worked. By a weekend the market makes inconsistent impression. On the one hand, the dealers are going to play upwards. And that is promoted by reception in the Friday's evening of 3.1 billion tenges for the earlier purchased notes of the National Bank, and also by cancellation of Friday's indexed notes-14 placement. On the other hand, reduction of trades volume to a minimum (in the current conditions), sharp grow of spreads and behavior of separate banks on Friday's trades speaks about a dealers caution. The opened long dollar positions already have a big potential yield. It is necessary to fix the profit. The powerful interference of head bank of country in the Monday's trade is rather probable, but: The "crouch start position" is justified, expectation and attentiveness are urgent. Therefore, IRBIS forecast from the next week: further strengthening of dollar, but with possible and insignificant correction of the rate downwards on Tuesday and Wednesday. More cardinal correction of a dollar rate can be caused only by administrative measures of the National Bank: by decrease of allowed currency net - position of banks of the second tier, by increase of the share of obligatory sale or by other measures.