ANALYSIS: In April of 2006 GS market activity on KASE continued to increase gradually owing to growth of issuing activity of Finance ministry and the National bank

/IRBIS, Aslan Juassov, Andrey Tsalyuk, May 5, 06/ - In April of 2006 on Kazakhstan stock exchange (KASE) in GS purchase and sale sector 147 deals for a total of KZT68,852.2 m. are registered (equivalent to 544.4 m. US dollar), which amounted 5,5% from the total exchange turnover of the month (in March - 4.6%). Relative to March of 2006 turnover of the sector increased by 41.8% in tenge and 43.9% in dollar expression. In sector of primary market the Finance ministry held two specialized trades on offering their obligations. On April 18 MEUJKAM-180 of KZKAKY150035 issue (MUJ180_0003; KZT1,000, KZT17.5 bn., April 18, 06 - April 18, 21, floating annual coupon, equal to inflation rate in period +0.01% APR, 30/360) were offered on trades. Fixed coupon rate of bonds (+0.01% APR) was determined on the auction, and Finance ministry by means of 15 deals borrowed KZT17,500.0 m. or equivalent 137.9 m. US dollar in budget. Based on current inflation rate the forecasted yield of offered obligations is estimated by IRBIS at 9.17% APR. On April 19 in KASE's trade system an additional offer of MEOKAM-84 of KZK2KY070078 issue (MOM084_0007; KZT1,000, KZT12.8 bn. after additional offer, October 12, 04 - October 11, 11, semi-annual coupon at 5.70% APR, actual/365) was held. As a result of the additional offer the Finance ministry by means of 22 deals borrowed in budget KZT5,446.1 m. or equivalent 43.3 m. US dollar under 2.50 - 4.05% APR. Relative to March of the current year the turnover of GS primary market increased by 27.5% in tenge and by 29.3% in dollar expression. In purchase and sale sector of the secondary market 110 deals for a total of KZT45,906.2 m. ($363.2 m.) were made. Relative to March of 2006 the turnover of the given market segment increased by 50.3% in tenge and by 52.4% in dollar expression. Statistic indicators of Kazakhstan GS purchase and sale sector in April and the structure of the secondary market turnover are given in the table (in parentheses - comparable indicators of previous month). --------------------------------------------------------------------------------- Yield to maturity for a buyer,% year. Maturity ------------------------------------- Volume, m. term, last weighted tenge in Number days min max deal average market price of deals -------------- ------- ------ ------ --------------- ------------------ -------- Discount GS (KZT): МЕККАМ, notes of National bank - 80.9% (57.8%) of the market -------------------------------------------------------------------------------- less than 8 1.00 2.00 2.00 1.37 (0.67) 1,935.7 8 8 - 14 0.75 3.00 0.75 2.57 (2.11) 15,301.9 20 15 - 28 1.55 3.01 3.01 2.36 (2.04) 18,870.5 37 64 - 91 2.03 2.10 2.10 2.10 (1.70) 1,019.9 5 -------------- ------- ------ ------ --------------- ------------------ -------- Subtotal 37,128.0(28,075.3) 70 (57) -------------- ------- ------ ------ --------------- ------------------ -------- Coupon GS (KZT): МЕОКАМ - 18.0% (4.2%) of the market -------------------------------------------------------------------------------- less than 730 2.72 3.00 3.00 2.73 (2.18) 258.6 5 731 - 1095 2.75 2.78 2.75 2.76 (2.86) 427.1 5 1096 - 1460 2.80 3.19 2.80 2.99 (2.86) 3,038.2 7 more than 2191 3.00 4.30 4.05 4.18 ( -) 4,555.8 20 -------------- ------- ------ ------ --------------- ------------------ -------- Subtotal 8,279.7 (2,025.1) 37 (17) -------------- ------- ------ ------ --------------- ------------------ -------- Coupon GS (USD): bonds of Atyrau oblast - 0.2% ( -) of the market -------------------------------------------------------------------------------- less than 730 5.90 5.98 5.98 5.98 ( -) 72.9 2 -------------- ------- ------ ------ --------------- ------------------ -------- Subtotal 72.9 ( -) 2 ( -) -------------- ------- ------ ------ --------------- ------------------ -------- Euronotes of Kazakhstan - 0.9% (0.9%) of the market -------------------------------------------------------------------------------- less than 730 5.55 5.55 5.55 5.55 (5.18) 425.6 1 -------------- ------- ------ ------ --------------- ------------------ -------- Subtotal 425.6 (443.7) 1 (2) -------------- ------- ------ ------ --------------- ------------------ -------- TOTAL 45,906.2(30,544.1) 110(76) -------------------------------------------------------------------------------- Exchange turnover share in total volume of purchase and sale deals of Kazakhstan GS secondary market in April grew to 73.7%. In March it was 57.0%. Given data testify that activation of GS exchange market is going on. In the opinion of IRBIS analytics, in April it was caused primarily by the growth of issuing activity of issuers and by reconsideration of their view on the yield of offered securities. For instance, for the first time while offering MEUJKAM the Finance ministry introduced a special restriction on value of fixed coupon rate, which is indicated in submitted bid by initial dealers. This value under the terms of trades holding could not be the negative value or be equal to zero. Thus, the Finance ministry provided real positive yield of its bonds, protecting pension assets from unprincipled actions of people, who control them. National bank also increased the attraction of its notes. April on the primary market started from offering notes-28 under 2.22% APR, the last auction of the month was characterized by the yield at 3.01% APR. Growth of offering volume of Finance ministry marginally affected the secondary market. Appearance of new bonds nearly evoked restructuring of investors' portfolios, however, supply growth of MEKAM and notes, nevertheless, were fixed on KASE. The actions of the National bank had a profound effect on the market. Owing to a very high volume of buying up on domestic market of US dollar, the head bank not only increased yield of its notes at offering, but also distinctly increased volume of their issue, which positively affected on exchange operations volume of the secondary market. In the dynamics of GS yield on KASE no changes were observed in April. Yield of discount bonds, as usually, correlated with the same indicator of the primary market, and MEOKAM yield changed in different directions, depending on duration of resold obligations. [2006-05-05]