Kazakhstan will clarify itself about bonds for KZT12.5bn having accepted budget-03

/REUTERS, Astana, Raushn Nurshyeva, September 18, 02/ - The final mechanism of floatation of Kazakhstan treasury bonds in the amount of KZT12.5bn (about $80m) and their yield will be known after the Parliament accepts the budget for 2003, said the Minister of economics and budget planning Kayrat Kelimbetov. On Monday the prime-minister Imangali Tasmagambetov, having told no details and issue terms, informed about the forthcoming treasury bonds issue, means from which are to be directed to compensation of the lost deposits of population in the former saving bank of USSR. According to the legislation the Parliament accepts budget till December 15. "As a whole, the policy has been determined, tasks have been set, but a concrete mechanism.. IT is necessary to present the budget to Parliament (for 2003)", - said the minister to Reuters during interview on Wednesday. He assumed that yield of these securities will equal to about 8%. According to Kelimbetov's words, the term of securities circulation will equal to one, two and three years and they will be redeemed according to the age of depositors of the former savings bank. "Their owners will be depositors of the former Savings bank... and if they want to receive money in advance by cash, there will be operators there - second tier banks", - he said. "Dealers at the secondary market will purchase them and give back at face value, for example, and wait for the yield by the end of redemption date ending", - said Kelimbetov. KAZAKHSTAN WAITS FOR EUROBONDS OF DEVELOPMENT BANK On October 2 the Government of Kazakhstan will redeem 5-year eurobonds in the amount of $350m. The biggest part of eurobonds is in portfolios of pension funds ($140-150m) and commercial banks ($60-70m) of Kazakhstan. According to Kelimbetov's words, the Government has enough means to redeem bonds without re-financing. "IN the beginning it was planned that we (Government) will issue new eurobonds... In this year we redeem eurobonds due to overfulfillment of revenues, due to the reserve, which has been accumulated by the Minitsry of finance", - said the minister. After eurobonds redemption domestic participants of the market will have significant resources. The Government and the National Bank intend to extend possibilities for investing, having offered short-term liabilities (notes) of the National Bank, domestic bonds of the Ministry of finance and having increased limits of investing into corporate securities for pension funds up to 45% from 40. The state Development Bank of Kazakhstan also intends to come to the market with eurobonds. Bonds parameters of Development Bank of Kazakhstan, which intends to present them to investors in Europe the next week, are not known yet. Analysts forecast issue volume on the level of $150m. Kelimbetov has the same opinion. "Development bank... makes eurobonds issue and, probably he will assume some part, which pension funds possess ", - added the minister. He said that the Government was preparing the program of foreign borrowings, but did not tell details. "One should not go ahead of time... We develop corresponding program", - said Kelimbetov. "Now we switch from foreign borrowing to internal ones i.e. the structure is changing. I believe this is positive phenomenon". The major purchasers of domestic bonds are Kazakhstan pension funds, which, according to existing norms, must support 40% share of state securities in their quickly growing portfolios. Though this share is to decrease in the nearest future to 35%, funds are not satisfied with the present situation and call actions of the Ministry of finance "twisting of arms". [2002-09-18]