Kazakhstan government bonds are rising along with tenge rate

/REUTERS, Almaty, Olzhas Auezov, July 4, 03/ - Prices on Ministry of Finance bonds and National Bank notes grew last week in Kazakhstan due to high ask on deficit instruments in tenge, traders say, pointing to relative calm in other sectors of the market. Growth of tenge rate to US dollar compels investors to purchase tenge securities, which are issued by Ministry of finance and the National Bank, whereas the majority of corporate securities are tied to declining dollar. Tenge closed last week at 148.0 per dollar, and grew on Tuesday to 147.55 already. On Friday weighted average rate on the main session totaled KZT147.73 per dollar. "[Investors] are seizing up all that is possible [in securities market]", - said trader of the pension assets management company (PAMC) BTA Asset management. "Yesterday [on Thursday] the NBK borrowed 21 bn (tenge) on notes - this is a record", - analyst of western investment company made an example. At that yield of 112-days bonds offered on Thursday totaled 5.27% APR, having decreased sharply relative to the last auctions (5.37% on 77-day notes and 5.43% on 154-day). Inflation in annual expression equaled to 5.7% APR in June. "We had no choice, we had to take these securities", - explained trader of BTA Asset management. "It seems that the National Bank begins to prepare all to decline refinancing rate, possibly, to 6.5% (from the current 7.5%), - believes the analyst of western company. - This is the evidence that they [National Bank] will hold the inflation and won't watch for the rate". Ministry of finance of Kazakhstan also offered bonds with sharp growth of price: yield of 2-year securities, issued on Wednesday, amounting to KZT2 bn totaled 6% APR relative to 6.70% APR on the last auction of June 9. "Ministry of finance is just jeering, throwing sops", - assessed analyst of western company the actions of the Ministry. Main investors in the market of corporate securities are pension funds. They actively started to make transactions with low volume of securities, manipulating on their market price in order to increase market price of their portfolios according to new approach, recommended by the National Bank. However, in opinion of market participants, only further issues of corporate securities in tenge are able to change the situation. "There is no sense in purchasing both dollar eurobonds (of Kazakhstan issuers) and foreign securities because tenge is strengthening to all currencies, - said trader of BTA Asset Management. - More likely corporate tenge issues will save the situation. Halyk Bank of Kazakhstan, one of the three largest, and medium in size CenterCredit Bank informed about issue of the securities without any ties to dollars in June. Traders expect that in the near future mortgage company, controlled by the National Bank, will enter the market with new bonds. [2003-07-04]