KASE opened test trades in automatic repo sector

/IRBIS, July 10, 01/ - Today the Kazakhstan Stock Exchange (KASE) opened test trades in automatic repo sector. The trades are held in the trade system of the KASE from 11:30AM to 5:00PM Almaty time. Due to this, till the end of this week the traders may familiarize themselves in this sector of the market and start a real trades next week. Additional information will be provided about the beginning of a real trades. Depending on the structure of the automatic repo market, which will be set by the Board of the KASE, repo deals can be concluded in the trade system for several fixed terms. When submitting bids, repo rate will be used as a price of financial instrument, which is the return of the transaction, expressed in APR and calculated on the basis of the difference between closing and opening values of the repo and its term. The opening value, expressed in the currency used to make a deal, is used as a quantity. The party that made a purchase deal in automatic repo sector is a seller of financial instruments - the object of repo deal when opening deal is concluded. Respectively, party that made a deal to sell in automatic repo sector is a buyer of financial instruments - the object of repo deal when opening deal is concluded. Calculation of a necessary quantity of financial instruments needed to conclude an opening deal will be made automatically at prices set in the trade system, so as to ensure that value equivalent of financial instruments on opening deal is equal or exceeds the opening value. Calculation methods of financial instrument prices will be defined by Risk Committee of the KASE. The Board of the Exchange will regulate the structure and activity of the Committee. When making a deal in automatic repo sector the opening value is defined as the total fixed at conclusion of repo deal, while the closing price - as the price of the value of opening repo deal plus the return on a repo deal, which is calculated using the following formula: opening value is multiplied by the return fixed at striking a repo deal, divided by 365 and multiplied by the repo term. Repo term is the number of calendar days between repo opening and closing dates. It should be noted that opening and closing values are automatically corrected by the trade system of the Exchange based on the method developed by the KASE to keep correct records of securities movements in back-offices of the trade participants. On automatic repo market deals will be concluded using both methods: uninterrupted counter auction and direct quotations. Commission fee at automatic repo sector will be 0.25% of the total return of a concluded deal. Total return is defined as the product of number of securities used in the deal and the difference between closing and opening prices of the repo. Commission fee will be collected both from the seller and buyer, as well as both in opening and closing of repo. If repo term is changed (repo prolongation), total return is calculated according actual execution period of repo closing deal. Now the trade participants can make repo rates at KASE using the government securities (GS) and corporate securities (CS). The trades are conducted by submitting bids by the participants in the trade system of the KASE on certain financial instrument, which is used as an object of repo deal. When this method is used, the direct quotations method is used. The bid contains the title of the counteragent based on the coding adopted at the KASE, trade code number, direction (purchasing or selling) of opening deal, opening or closing price, number of financial instruments and repo closing date. The opening and closing value of the repo is calculated as the product of the price and the number of financial instruments fixed on the deal striking moment. After the opening of automatic repo sector the participants of the trades at the Exchange will be able to make repo deals both in this sector and using the old methods.