U.S. dollar market of Kazakhstan: day results

/IRBIS, May 7, 03/ - Following is the table of major indicators of Kazakhstan market for U.S. dollar (more than 99% of country's all currency market). Trends are shown relative to corresponding figures of previous day. ------------------------------------------------------------------------------ Trades in U.S. dollars at Kazakhstan stock exchange (KASE) ------------------------------------------------------------------------------ Instrument USD TOD USD TOD USD TOM USD SPOT Session Main Additional. Evening Evening Time of trades (AST) 10:15a-11:00a 11:30a-3:30p 2:00p-6:00p 2:00p-6:00p Rate (KZT/USD) 151.35(-0.23) 151.38(-0.18) - - Volume of session (m) 38.165(+23.790) 8.380(+3.315) 0 0 Bid 151.32(-0.23) 151.37(-0.15) - - Offer 151.34(-0.23) 151.38(-0.18) - - Number of participants 14(-2) 13(-1) 0 0 ---------------------- --------------- ------------- ----------- ------------- Indicative U.S. dollar quotations in over-the-counter market in information system of REUTERS at closing of KASE sessions (disregarding settlement dates) ------------------------------------------------------------------------------ Bid 151.29(-0.22) 151.35(-0.12) 151.30(-0.10) Offer 151.34(-0.22) 151.42(-0.15) 151.35(-0.15) ------------------------------------------------------------------------------ Notes: weighted average rate is given for main and evening sessions, for additional - closing rate; best ask and offer prices at closing of the trades are shown as the Exchange's quotations. One can say that the past day graphically (even if with a little exaggeration) demonstrated scenario of further development of US dollar market of Kazakhstan. In January-February tenge's strengthening relative to US dollar was caused mainly by one factor - selling of big volumes of currency, which had been earned by export of raw stuff (mainly oil) at the domestic market, but now there has appeared equally powerful factor, which will work in 2003 in the same direction. This is the matter of successful floatation of euronotes of KAZKOMMERTSBANK OJSC at the international debt market (more precisely, its special enterprise) for $500 m. on exclusively profitable for a Kazakhstan corporate issuer terms. Inflow of this sum to domestic market significantly increased potential of tenge for growing not only due to selling of borrowed dollars at KASE. During the last week these sales formed the conjuncture, which made exporters shorten their currency positions, and it made traders, which had speculative mood, play downward. After successful (for Americans) ending of the Iraq war Kazakhstan market hung in expectation of strengthening of American currency's positions. Exporters kept dollars that was well felt in the middle of April. Actions of the largest Kazakhstan bank in May have taken the market from the condition of expectation and gave it a powerful impulse for movement downwards. The perception of the impulse is also promoted by the situation at the international currency market where euro started growing again. Geopolitical risks were substituted by risks of uncertainty in the further economic development the USA. On May 6 Committee of the US Federal reserve system had to confess that expected rise of the American economy and return of trust to dollar on the basis of decrease of geopolitical risks had failed. However list of factors, which will promote to tenge's strengthening in Kazakhstan, do not become exhausted because of it. Other Kazakhstan companies intend to use the "Window to Europe", which has been made by KAZKOMMERTSBANK OJSC by successful floatation of its euronotes. It's obvious that Bank TuranAlem OJSC will be the first. Halyk Bank of Kazakhstan OJSC intends to make offering at international markets before January 1 of 2005 for $450 m. Already in this year NC KTZh CJSC declares about its readiness to offer euronotes. It's not excluded that Development Bank of Kazakhstan CJSC, which on March 10 was assigned investment rating on the level of country's one, will come to the world market with a new tranche of mid-term notes. This all allows to assume that decrease of flows of dollars to Kazakhstan due to falling oil prices will be compensated by increase of flow of borrowed currency, which will be sold at the domestic market. Coming back to events of the past day, which was closed with significant decrease of dollar's rate, it is necessary to notice, that haggling during KASE's main session was opened below significant technical support level, and later the market was fixed on minimum prices. Evening growth of dollar's rate from 151.26 to 151.38 was caused by traditional fixation profit by traders on short daily positions, no more. During day the bottom of the market was not defined. Results of the technical analysis assume development of the market towards return breakdown. But, most likely, this attempt will fail, and the market will enter the new phase of global tenge's strengthening. At present target of the new trend seems to be on the level of 149.90 - 150.00 tenge per dollar. [2003-05-07]