QUESTIONING-Forecast of bonds' yield in Kazakhstan

/REUTERS, Almaty, Oljas Auezov, March 7, 03/ - Traders in Kazakhstan expect stability of prices of sovereign and corporate eurobonds, but do not exclude significant rise in prices of government bonds under condition of deficit and long instruments in tenge. According to the data of questioning of Reuters, which was made on Thursday and Friday, most questioned traders of largest banks believe that yield of the most liquid corporate eurobonds - Development Bank of Kazakhstan, Kazkommertsbank, bank TuranAlem and oil transportation state company Kaztransoil - will be stable. Some market's participants do not exclude growth of dollar instruments' yield in case of further decreasing of dollar's rate relative to tenge. "If dollar goes lower, dollar securities will fall (in price), - said dealer of bank CenterCredit. - Pension funds will have to get rid of most liquid (dollar) securities". More than 70% of pension funds' assets - main investors at Kazakhstan stock market - have been invested into dollar or indexed on tenge devaluation rates securities. Dollar' s rate relative to tenge was constantly decreasing since the beginning of the year and only on Wednesday and Thursday became stable, and on Friday increased a bit. Ministry of finance of Kazakhstan still keeps from bonds issue, and investors purchase in large volumes the only available tenge instruments - National Bank's short-term notes. Volume of notes in circulation since the beginning of the year increased by about $300 m. "I can see the great tenge liquidity and lack of instruments, especially long-term ones", - said Citibank's trader. In accordance with it many participants of the questioning decreased the expected yield of three-year non-indexed bonds of the Ministry of finance. In traders' opinion, special indexed treasury bonds with 1-3-year circulation term, which have been issued by the Ministry in order to compensate deposits in Savings bank of Kazakh SSR. Halyk bank's representatives informed on Tuesday that most citizens, who applied for compensations, preferred to let bank purchase bonds, receiving cash, and promised to sell securities at secondary market afterwards. "Bonds will be quickly bought, moreover in presence of such the small volume", - trader of bank ABN AMRO believes. The Ministry of finance estimated volume of deposits, which are subjected to compensation, at $80 m. Below are forecasts of yield on different instruments (average index between demand and offer, as percentage APR, by the end of the period - month, three months and half a year): ------------------------------------------------- in 1 month 3 months 6 months ----------------- ----------- --------- --------- Three-year МЕОКАМ (GTB) (yield at the last auction on November 14 - 7.40% APR) ABN AMRO Bank 6.77 6.77 6.50-6.80 Citibank 6.50 6.50 5.80-6.00 AMB 7.40 7.40 7.10-7.20 Bank TuranAlem 7.40 7.40 7.40 Kazkommertsbank 6.50 6.80 6.80 Bank CenterCredit 6.50 6.50 6.50 ----------------- ----------- --------- --------- Eurobonds of Kazakhstan with maturity in 2007 AMB 4.00 4.00 4.00 Bank TuranAlem 3.70 3.80 4.00 Kazkommertsbank 4.00 4.00 4.00 Bank CenterCredit 3.00-3.50 3.00-3.50 3.00-3.50 ----------------- ----------- --------- --------- Eurobonds of Development bank of Kazakhstan Bank TuranAlem 6.40 6.20 6.00 Kazkommertsbank 6.50 6.50 6.50 Bank CenterCredit 6.00-6.50 6.00-6.50 6.00-6.50 ----------------- ----------- --------- --------- Eurobonds of Kazkommerts International B.V. Bank TuranAlem 7.80 7.60 7.40 Kazkommertsbank 7.80 7.80 7.80 Bank CenterCredit 7.00-7.50 7.00-7.50 - ----------------- ----------- --------- --------- Eurobonds of TuranAlem Finance B.V. - 2007 Bank TuranAlem 7.80 7.60 7.40 Kazkommertsbank 8.00 8.00 8.00 Bank CenterCredit 7.00-7.50 7.00-7.50 - ----------------- ----------- --------- --------- Eurobonds of Kaztransoil Bank TuranAlem 11.80-12.20 - - Kazkommertsbank 6.50 6.50 6.50 Bank CenterCredit 6.50-7.00 6.50-7.00 6.50-7.00 ------------------------------------------------- [2003-03-07]