Complete results of notes-56 #402 offering

/IRBIS, June 2, 00/ - Today the National Bank of Kazakhstan (NBK) held the 402nd auction for offering notes with KZT100 par value and 56 days circulation term. Announced volume of the issue is set by the emitter at KZT400 mln. Size of satisfaction of non-competitive applications is 60% of specified amount. Auction was held with additional during the day. Following is the complete offering data and comparison with previous similar issue. Type of the securities Notes-56 Notes-56 NSIN KZ98K2807A03 KZ98K0707A08 KASE trade code NTK402.056 NTK396.056 IRBIS registration number 402/n 396/n Par value, KZT 100.00 100.00 Issuance date June 02, 2000 May 12, 2000 Circulation start date June 02, 2000 May12, 2000 Maturity date July 28, 2000 July 07, 2000 Days in circulation 56 56 Number of Primary agents 12 (+ 3) Demand, mln KZT 1,815.2 (+ 777.9) WA yield on demand, % APR 11.85 (- 1.08) Planned volume, mln KZT 400.0 (- 400.0) Actual volume, mln KZT 1,190.3 (+ 416.8) Cut-off price, % of par value 98.25 (+ 0.17) WA price, % of par value 98.25 (+ 0.17) Maximum yield, % APR 11.58 (- 1.15) Weighted average yield, % APR 11.58 (- 1.15) Effective weighted averageyield, % APR 12.15 (- 1.27) It was an interesting auction. From one part, NBK should have displayed its position regarding the forex market. From another part, offering results were indicative in terms of behavior of market participants and, first of all, banks. Tactics of the emitter indicates that the bank does not have any pronounced desire to sterilize correspondent accounts of banks in conditions of excessive tenge liquidity and high dollar demand. At any case, the bank has not stabilized yields of the notes for this purpose and continued to decrease it. This behavior is an example of the emitter's self-confidence: In the lack of diverse market of financial instruments, and under the stable exchange rate participants will have to put on auction substantial volumes and ease demand on notes even at their low profitability. Besides, considering double growth of inflation rate in May to April, NBK is not interested in strengthening of tenge. Therefore, it should not undertake any measures on tightening of monetary base to decrease demand on the US dollar. The bank's tactics revealed the validity of NBK position. The parameters of bid demand indicate that banks shifted their funds to the notes rather than dollars. However there was one notable statement on this issue, Kazakhtsan's dealers gave to REUTERS today. They claimed that weakening of tenge for past two days is explained by too low yields of SS. This prompted banks to reallocate funds to the US dollar. However, the results of notes floatation (as well as previous floatation of MEKKAM-3 and today's floatation of MEKKAM-6) deny this statement. At afternoon, despite low quotations of overnights, tenge took a strength under the influence of SS auctions. The National Bank finished the twenty third week of the year 2000 (May 29 - June 2) on primary market for SS with following results. With actual repayment volume of KZT1,675.9 mln the emitter raised KZT1,560.3 mln at one auction. Balance of net-borrowing of the National Bank was negative - KZT115.7 mln.