Sergei MATYUSHENKO
ALMATY, Oct 13
(THE GLOBE)
�No serious changes in the policy of National Bank are expected,� the new chairman of the NB of Kazakhstan announced on Wednesday in Almaty. Grigory Marchenko said also that no radical personnel replacements in the structure of the country�s leading bank were expected.
�From this moment onwards the policy of the rate of the currency will be worked out jointly: the issues regarding the change of the currency�s rate are to be discussed with the President, government and international financial organisations,� Mr. Marchenko stated.
The main objective of the central bank of the country will be to prepare the financial information, to calculate different options of actions, while the final decision will be taken by the political authorities of the country.
Another important task of the National Bank will be to work out measures to stimulate the attraction of the republican population�s savings to the banking sector. However, to achieve this aim it is necessary to restore the population�s lost trust to banking deposits. The new chairman of the bank emphasised that this was to be promoted by the establishment of a collective deposit insurance system and by the toughed access to the information of deposits.
�At present savings of the Kazakhstan population have come to about US$ 1.5 billion. However, private deposits in banks are US$ 320 million,� he said. If private deposits in the banking system of Kazakhstan come to US$ 1 billion, Grigory Marchenko promised the President to shave his famous beard.
Mr. Marchenko positively evaluated the results of his predecessor�s activity. From April 1 to October 1 the total volume of banking deposits had increased by 66%, he said. For the same period the volume of credits allotted by second-level banks increased by 37%. Though till the present time there is no information regarding the condition of the balance of payments for the third quarter, Grigory Marchenko is confident that the negative balance of the balance of payments will significantly reduce.
Kadyrzhan Damitov, the ex-chairman of the bank will be a member of the Board of the National Bank. He will present interest of the country�s leader. It is also known that Mazhit Yesenbaev (Finance Minister) and Yerzhan Utembaev (deputy the PM of Kazakhstan) were also included in the Board of the National Bank.
Having touched the theme of the continuously increasing rate of dollar, the ex-chief of the National Bank said that taking into consideration the improved export situation and industrial growth, the �tenge/dollar� rate was set too high due to nervous situation observed in the market in September.
Most representatives of second-level banks and specialists working in the Kazakhstan financial market positively treated this appointment. Financiers consider Grigory Marchenko�s deserts to be the establishment of the state securities market in Kazakhstan when he worked at the National Bank, the creation of the stock market infrastructure and the pension reform (he is one of the authors of the latter).
Note. Before the last appointment Grigory Marchenko worked at the Ministry of Non-ferrous Metallurgy, was appointed the assistant of the Vice-President of the republic, the deputy of the NB chairman, where he supervised banking control issues, the chairman of the National Commission on securities. For the last one and a half-year he headed �Douche Bank Securities (Kazakhstan)�.
According to NSC the sum of Kazakhstan�s pension founds� net assets at the beginning of October - $397.1 million
/IRBIS, Oct.13, 99/ According to the National Securities Commission (NSC) sum of net pension assets (PA) in republic (pension assets minus commission compensations charged and accounts payable of pension payments) as of October 01, 1999. has made 56,237.3 million tenges or $397.1 million at the average weighted exchange rate of this date.
Comparable parameter for September 01 is 53,128.1 million tenges or $392.2 million. During a month assets have grown by 5.9% in tenges and by 1.2% in dollars. The growth in the previous month was 5.1% in tenges and 2.3% in dollars. Thus, a gradual delay of assets growth is observed.
At the beginning of September the complete sum of PA has made 56,408.2 million tenges, from them 55,430.4 million was invested.
The share of State Accumulative Pension Found has decreased during a month from 62.9% to 57.4%.
In total 6 Pension Assets Managing Companies (PAMC), 14 non-state and one state Accumulative Pension Found worked in the country.
Invested assets were distributed among financial tools as follows (in brackets - corresponding parameter on September 01):
� internal State Securities of the Ministry of Finance (KZT) - 1.04% (3.97%);
� internal State Securities of the Ministry of Finance (USD) - 59.18% (60.13%);
� eurobonds of the Kazakhstan sovereign debt (USD) - 33.67% (29.58%);
� the National Bank notes (KZT) - 0.89% (2.26%);
� the National Bank notes (USD) - 0.66% (2.26%);
� bonds of the local executive bodies of Kazakhstan (USD) � 0.09% (0.08%);
� non-state securities (KZT) � 0.30% (0.31%);
� non-state securities (foreign currencies) � 2.94% (2.40%);
� deposits and deposits certificates (KZT) � 0.05% (0.13%);
� deposits and deposits certificates (foreign currencies) 1.17% (1.12%).
The data shown testify that during a month the structure of the investment portfolios did not change essential. The most expressed tendency is increase of euronotes of Kazakhstan share. PAMC try as much as possible insure risks.
Note of IRBIS: the analysis is carried out exclusively on data, given to agency by the National Securities Commission of Kazakhstan.
At KASE dollar exchange rate continued to fall due to shortage of tenge of the banks
/IRBIS, Oct.14, 99/ The next trades in US dollar, Deutsche mark and Euro were held at Kazakhstan stock exchange (KASE). 24 banks participated in the trades.
Today the trades were opened in the US dollar at 140.50 tenge per unit, but such a weak opening was not appropriate for the market conjuncture. In less than a minute the dollar exchange rate soared to 141.00 with minimal volume of deals. This growth was followed by a five minute �break� � demand and supply were balanced on the market.
After a little correction of the dollar exchange down to 140.90 sellers raise the price of an American currency without much of an effort up to 141.05 � maximum level of the day.
From this mark the dollar exchange rate began to fall under the influence of large volumes of supply. Beginning about the middle of the session the market were getting balanced at 140.95-140.96. All remaining deals were made at this prices.
The trades were closed at � 140.95/98 tenge per dollar.
239 deals were made in US dollars. Weighted average dollar exchange rate made 140.95 (-0.68). Volume of the session - $12.780 mln (-$4.210 mln). Exchange rate fluctuation during the trade did not exceed0.39%.
In general, the market seemed to be balanced. Demand of the banks of the second tier continues to decrease, and supply to grow. Today six banks differed form the others with large sale volumes, whereas only three traders were actively buying an American currency.
Dealers� tactics on the trades and related sectors of the financial market show that the banks were selling not only exporters� earnings. Shortage of tenge is still felt on the market caused by budgetary payments, and the banks of the second tier are shortening their currency positions. Today it was more apparent.
One hour after closing of the trades on over-the-counter market of Kazakhstan dollar was quoted at 140.96/141.06 tenge per unit, two hours later � 140.86/141.05.
4 deals were made in Deutsche mark. Weighted average exchange rate of the mark � 76.86 (-1.40) tenge per unit. Trade volume � DEM70 (+10) thousand. At closing of the session Deutsche mark was asked at 76.50 tenge per unit of the currency.
3 deals were made in euro. Weighted average exchange rate of the euro � 151.10 (-0.99) tenge per unit. Trade volume � EUR140 (+55) thousand. At closing of the session euro was quoted at 150.00/152.00 tenge per unit.
Sergei MATYUSHENKO ALMATY, Oct 14 (THE GLOBE)
�A group of Investment Funds of Arabian states allots a credit on privileged conditions in the amount of US$ 232 million to realise 8 projects on establishment of the social and technical infrastructure of the republic,� the chairman of the Agency on Investments announced on Thursday in Almaty.
The Kazakhstan party had submitted to the Arabian delegation for further consideration only those projects, which had been included in the program of priority investment projects in the republic, said Dulat Kuanyshev.
�The state participation in realisation of these projects will be represented either by financing of up to 15% of each project or granting state guarantees,� the chairman of the Economic Planning Agency stated. According to Roman Solodchenko, responsibilities taken by Kazakhstan on co-financing will not exceed US$ 30 million. Depending on a concrete project Kazakhstan will start to repay this credit in 10 to 20 years.
The list of projects, realisation of which is expected in 2000, included the construction of the motor way Karaganda-Astana, modernisation of the cardiological centre in Almaty, reconstruction of landing and taking off strip if the Atyrau airport, and establishment of the modern water-supply system in the Aral region, etc.
A representative of the Kuwait Fund of Arabian economic development also said that besides the participation in the above-mentioned projects, the government of his country had allotted the unpaid grant in the amount of US$ 10 million intended for construction of a new administrative building in the capital of the republic.
According to the results of the meeting at �the round table� the sides signed the memorandum on mutual understanding.
ALMATY, Oct 13
(THE GLOBE)
The International Financial Corporation (IFC), the organisation of a the World Bank Group specialising on support of private business, opened credit lines for the total amount of US$ 17.5 million to the two biggest Kazakhstan banks.
According to the information received by THE GLOBE from IFC, beside the loan allotted before to TuranAlem bank in the amount of US$ 15 million, (the agreement for the same was signed in Almaty), the International Financial Corporation allotted a loan of up to US$ 2.5 million to Kazcommertsbank.
A significant part of the money is to be utilised to credit small and middle-sized business on projects, which �comply with the ecological standards of the World Bank Group�, the IFC statement stipulates.
The deputy the director of the IFC department in Central Asia Khosrow Zamani announced that the two new credit lines were a sign of trust of the corporation to both banks and of confidence in a successful work of TuranAlem bank after the privatisation. In addition he said that the presence of a strong financial sector in Kazakhstan was vital for the growth of the private business and IFC would support it.
Oct 14 /IRBIS, based on information of �Euroweek�/
On October 1 �Euroweek� � a weekly issue devoted to international market of capitals � published an article �Kazakh blow-out reopens emerging dollar markets�.
In IRBIS analysts opinion, some conclusions of this review are of interest in terms assessment of the third issue of the republic�s sovereign debt placement.
We�ll remind that the issue received ISIN XS0102764031 on the euromarket (Reg. S), code US486661AC56 in USA (Reg. 144A) and was placed for five years via ABN Amro and Deutsche Bank for $200 mln. Circulation will start on October 18.
Euronotes have a coupon rate of 13.625% paid out semiannually, 13.946% APR, and spread 825 base points over Treasuries with issue price 98.87% and a wide range of offer between 800-825 base points.
Deal was rated B1/B+/BB- in London and actually meant Kazakhstan�s return to the Euromarket after a two year break. The issue became the first among CIS countries since before the Russian crisis in August 1998.
Experts believe, that Kazakhstan�s success became a boost to other emitters from emerging markets, which were barred from major dollar markets in 1999. Investors shied away from investing their money in eurobonds of emerging markets when Latin and Eastern Europe countries were drifting between crises.
�We are pleased that Kazakhstan has been able to access the Euromarkets and demonstrate that single-B sovereigns still have access to international debt funding,� said Peter Schikaneder, director of debt origination at Deutsche Bank in London. �We feel that Kazakhstan had a clear and credible credit story to tell and that investors have recognized that fact.�
Reid Payne, global head of emerging market syndicate at ABN Amro in London, said: �With this issue Kazakhstan has been able to successfully differentiate itself from most of its neighbors and to achieve a landmark financing in a marketplace characterized by a lack of depth and susceptibility to event risk news.� He added: �Kazakhstan has capitalized on its strong economic fundamentals, based on healthy levels of foreign direct investment, responsible fiscal discipline and rising commodity prices.�
Relative to other comparable deals, issue of Kazakhstan gives 15 base points higher than Brazilian bonds (11.625% April 2004) trading at 810 bp over Treasuries. While Turkey had an 8.875% May 2003 deal and a 9.875% February 2005 transaction trading at 500bp and 600bp over Treasuries respectively. Syndicate members said that since both Brazil and Turkey are more frequent issuers with better established investor bases, it was appropriate that Kazakhstan should have paid a pick-up over their dollar offerings.
Although on an historical basis the pricing on this week�s issue was expensive for Kazakhstan, market participants said that the fact the country had been able to tap the Euromarkets at all was more significant than the relative cost. For the Kazakh authorities, the completion of this week�s dollar issue represents a vote of confidence in economic management policies which have saved the country from the financial chaos afflicting most of the country�s neighbors. It also marks a satisfying end to a protracted issuance process.
It was mentioned earlier that lead-managers of the project tried to place bonds in �euro zone�. However, these plans should not have to come true, since rising concerns over prospective debt defaults by the likes of Ecuador and Ukraine narrowed the potential investor base for lesser rated emerging market sovereigns.
In September the leads decided to change funding officials on a roadshow to the US, where they proved successful in drumming up support for an institutionally targeted Euro/144A dollar issue. ABN and Deutsche, which distributed $180m or 90% of the transaction, reported that the vast majority of their bonds were placed with institutions in Europe and US � split roughly 60% and 40% respectively � but that there had also been some interest from Asian accounts.
As well as demand from holders of Kazakhstan�s previous dollar Eurobonds, the lead managers said the issue had also succeeded in attracting new investors.
The leads are also confident of a continued strong secondary market performance based on the expectation that Kazakh pension funds, which are major holders of the country�s $200m 9.25% three year offering from December 1996, will roll over their holdings into this week�s new issue when that bond matures in December.
The article given an information that Romania (rating B3/B-/B-) is currently preparing to launch EUR150-EUR200 mln three year euro issue via Deutsche Bank and Merrill Lynch. Unofficial price talk suggests that the euro issue will feature a 15% headline coupon and discounted issue price to give a yield in the region of 17%-18%.
�Euroweek� informs that at Thursday�s closing in London the issue of Kazakhstan euronotes were traded at 99.0/99.5% with 813/800 bp over Treasuries.
IRBIS notes: according to ISMA, today on international market Kazakhstan eurobonds of the third issue are traded at 99.12/99.50%.
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