In July of 2004 volume of GS purchase and sale deals at KASE decreased 3.6 times to KZT42.0 bn.
/IRBIS, Ranida Gabdeyeva, Andrey Tsalyuk, August 10, 04/ - In July of 2004 at Kazakhstan Stock Exchange (KASE) 273 deals were made in government securities (GS) purchase and sale sector for a total of KZT42,007.2 m. or ($310.0 m.) that was 6.8% of total exchange's turnover of the month.
In comparison with June of 2004 the sector's turnover decreased 3.58 times in terms of tenge and 3.56 times in dollar terms. Relative to July of 2003 the turnover increased 1.64 times in tenge and 1.78 times in dollar terms.
Statistical indicators of sale-purchase sector in July and turnover's structure are given in the table (in parentheses - comparable figures of previous month).
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Yield to maturity
for the buyer, %APR
Days ------------------------------- Volume, m KZT Number
till maturity min max last WA at market cost of deals
-------------- ----- ---- ---- ------------ -------------------- ---------
Discounted GS (KZT): MEKKAM, National Bank's notes - 93.9% (68.3%) of the market
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less than 8 2.49 3.85 2.49 3.23 (3.21) 751.6 4
8 - 14 1.50 3.80 2.00 1.88 (3.78) 1,200.4 15
15 - 28 0.85 4.95 3.20 3.03 (3.70) 2,766.4 30
29 - 36 2.93 6.89 2.93 3.22 (4.00) 2,193.7 18
43 - 56 3.70 4.50 3.80 3.99 (3.81) 6.0 3
57 - 63 3.49 4.70 3.49 3.61 (15.03) 24.6 3
64 - 91 3.72 4.75 3.72 4.55 (4.40) 246.2 5
92 - 181 3.23 6.89 3.90 4.08 (4.72) 3,162.4 44
182 - 364 3.00 5.02 4.15 4.46 (4.80) 29,084.1 114
-------------- ----- ---- ---- ------------ -------------------- ---------
Total 39,435.3 (102,579.4) 236 (266)
-------------- ----- ---- ---- ------------ -------------------- ---------
Coupon GS (KZT): MEOKAM - 5.7% (31.0%) of the market
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less than 730 4.40 6.19 5.60 5.35 (5.71) 1,037.8 9
731 - 1095 4.50 6.43 6.43 5.30 (5.78) 993.3 15
1096 - 1460 5.25 6.53 5.90 5.92 (5.93) 268.6 8
1461 - 1825 6.00 6.00 6.00 6.00 (6.03) 27.0 1
1826 - 2190 6.08 6.09 6.09 6.09 (5.81) 84.2 3
-------------- ----- ---- ---- ------------ -------------------- ---------
Total 2,411.0 (46,555.9) 36 (94)
-------------- ----- ---- ---- ------------ -------------------- ---------
Coupon GS (USD): bonds of Atyrau oblast -
0.4% ( -) of purchase and sale sector's turnover
731 - 1095 8.20 8.20 8.20 8.20 (-) 161.0 1
-------------- ----- ---- ---- ------------ -------------------- ---------
Total 161.0 ( -) 1 ( -)
-------------- ----- ---- ---- ------------ -------------------- ---------
GRANDTOTAL 42,007.2 (150,262.5) 273 (366)
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In July stake of the exchange's turnover in total volume of purchase and sale deals made at Kazakhstan secondary GS market fell to 94.0%. In June it was 97.8%.
As specialists of IRBIS assumed a month ago, stock exchange's GS turnover abruptly fell in the analyzed month in comparison with June. In the previous review of this sector it was noted that over 77% of the whole GS turnover at KASE in June had fallen to the stake of stock exchange's two members working between each other only in a certain number of bonds. There was an idea about non-market nature of deals made by them. In July such situation was not observed and the market came back to its usual condition.
This condition is characterized by the exclusive prevalence of the shortest bonds in the turnover - they are MEKKAM of the Ministry of finance and National Bank's notes. On one hand, it's explained by the structure of the primary market, at which only these bonds were offered in July. On the other hand, it's most convenient to use the shortest securities as an instrument of short-term money reservation under condition of negative real profitability of GS to maturity, because rate are higher here than at repo market. Besides, the scheme, in which during primary floatations notes and МЕКАМ are bought mainly by banks - primary dealers, is lately actively functions at the market. After one-two days the considerable volume of purchased bonds is resold at the secondary market to pension funds at higher prices. Yield of GS to maturity for purchasers in such the deals is almost the same with auction one. However even an insignificant price difference of resale in this case guarantees the high yield of the scheme for the seller.
Peculiarity of July at stock exchange's secondary GC market is more pronounced tendency of falling of bonds yield. It's explained by the fact that issuers of МЕККАМ and notes, taking advantage of the high demand, again tried to raise prices at primary floatation. The secondary market reacted with adequate falling of rates for its conjuncture at present is formed mainly by price indicators of the primary market.
As the whole it should be noted that GS market in July did not seem to be liquid. Both demand and offer of securities were absent at KASE. Most deals are made by preliminary agreement of traders.
In the opinion of specialists of IRBIS, it's only the Ministry of finance, who can reanimate the secondary GS market by offering new long bonds indexed on inflation. Before it was announced several times about this intention, and, most probably, Kazakhstan will see them only in autumn.
[2004-08-10]