Kazakhstani bonds increased in value caused by expectations on tenge appreciation

/REUTERS, Almaty, Olzhas Auyezov, November 28, 03/ - The prices of Kazakhstani tenge bonds increased slightly due to expectations about local currency appreciation relative to dollar, traders say. "Yields at auctions (on GS floatation) were lower than previously, though insignificantly" - ATFBank's traders said. "Everyone leaves for tenge because of Marchenko's (the chairman of the National bank) speech", - Gabiden Baligimbekov, a dealer of CenterCredit bank thinks. In the mid of November Marchenko said that the National bank, which had been actively restraining tenge appreciation relative to dollar, was now ready to tolerate its real strengthening approximately by 10 percent. Tenge was strengthening over dollar almost uninterruptedly due to foreign currency revenues inflow from oil and metal export within first 7 months of 2003, and consolidated quite confident at new levels afterwards. "Pension funds gradually get rid off (bonds) SPV and switch to tenge", - Balgimbekov added. Pension funds are major investors at financial market of Kazakhstan. In October the National bank enacted new rules of pension asset management, having prescribed to pension funds to sell eurobonds they currently hold and which were issued through special entities (SPVs, Special Purpose Vehicles), with help of which major banks used to make offerings in order to reduce tax burden. Banks also made use of increased demand for domestic securities, because they need more funds since in Balgimbekov's opinion they have encountered storng demand for loans. Thus, Eurasian bank, Alliance bank, ATF Bank and Kazakhstan Mortgage company, which refinances banks mortgage loans are currently floating or intend to float in the nearest future its bonds. "Borrowers (of banks) became more active, and lack of funds forces financial institutions to issue securities in order to attract capital from pension funds", - a dealer said. In the nearest future the situation will remain stable in market participants' opinions. "Nothing will change till the end of the year, except for nervous jumps in the mid of the months caused by tax payments", a trader of ATFBank said. [2003-11-28]