Kazakhstan investors have gone to money market in search of yield

/REUTERS, Almaty, Oljas Auezov, March 21, 03/ - Kazakhstan banks and pension funds have switched from purchasing the National Bank's short-term notes to investing funds at repo market, which has become more profitable on account of tenge deficit, traders say, noting that long-term instruments are still not popular because of uncertainty about the war in Iraq and dollar's rate. Dollar's rate relative to tenge, which was almost uninterruptedly decreasing within two months and a half, strengthened by Friday to KZT152.20 for dollar from 150.88 on Monday. "Everyone has purchased currency and, in order to make payment, purchase tenge (at repo market)", - said dealer of bank CenterCredit. Due to the high demand rates at the repo market, where most deals are made with the term "overnight", suddenly increased and in some moments used to reach 13.75% APR, whereas yield of three-month notes of the National Bank remained unchanged on 5.60% APR. Traders do not expect an abrupt increase of demand for long-term government and corporate currency securities because they doubt that the started dollar's growth will be stable. "Actually there are no deals (on bonds) because there is "band of uncertainty " at the market: it's not clear, for how long dollar will be growing", - said a trader of bank TuranAlem. "This all (growth of dollar), seems to be brief", - an analyst of a western investment company believes. "There is the feeling that dollar will decrease more", - the dealer of bank CenterCredit agrees with him. [2003-03-21]