Kazakhstan
Last week the international rating agencies Moody’s and Fitch Ratings affirmed Kazakhstan's credit ratings (IDR) at Baa3, with a positive outlook and at “BBB” with a stable outlook, respectively. The rating agencies indicate that the main factors of such a credit rating were the low level of public debt, significant fiscal reserves, as well as the growth potential of the economy and household income.
Bonds of the Ministry of Finance of the Republic of Kazakhstan. Last week, the Ministry of Finance of the Republic of Kazakhstan placed 3 bond issues for a total of KZT45.8bn (KZT86.3bn in the previous week). Primary market bonds’ yield continued to decline, dropping 28-40 bps. Demand for long-term bonds was as usual high, but for 2-year bonds it exceeded the supply by 7 times.
On the secondary market, yields on 1-3-year bonds of the Ministry of Finance grew by 10-60 bps, and the trade volume amounted to T8 billion.
National Bank’s notes. Last week, the National Bank placed two issues of its notes for a total of KZT488 bln. of 28 day notes were placed in the volume of KZT388bn with the yield of 9.0096% (9.0069% on February 8). The demand was practically in line with the supply. KZT100bn of 182 days notes were placed with the yield of 9.22% (9.63% on January 20). Demand exceeded supply 5.9 times. At the same time, last week, the National Bank paid off 28-day and 182-day notes for a total amount of KZT538bn.
On February 16, the Asian Development Bank (ADB) raised KZT9.0 bn at KASE by placing 5-year international bonds with YTM of 9.95%. At the same time, on February 9, ADB placed 10-year international bonds in the amount of KZT8.4bn with YTM of 10.15%.
Corporate bonds. On Friday, Kazakhstan Stability Fund JSC placed KZT9.9bn of 3-year bonds. YTM decreased by 9bps up to 10.05% to the previous issue last week.
Regional market
The Ministry of Finance of the Russian Federation placed two OFZ-PD issues (with constant income) on February 17, 2021, totaling RUB 81.5 billion. The placement of the first issue with maturity on May 17, 2028 amounted to 42.2 billion rubles with the weighted average yield at 6.61% per annum. The yield on the previous similar OFZ-PD issue was 5.91% per annum. The placement of the second issue with maturity on July 18, 2035 amounted to 39.2 billion rubles with the weighted average yield at 7.11% per annum. The yield on the previous similar issue was 6.84% per annum.
The Ministry of Finance of the Russian Federation has also published a schedule of auctions for the placement of OFZs for 1Q2021. According to it, it is planned to hold 5 auctions in March 2021 alone (there were 6 of them in January-February). The planned volume of OFZ placement for 1Q2021 to total 1 trillion rubles. The major part of the planned placement of OFZ falls on securities with a maturity of 5-10 years (450 billion rubles) and over 10 years (450 billion rubles). The volume of OFZ placement at par as of February 17, 2021 amounted to 423 billion rubles. As a reminder, the planned placement of OFZs in 4Q2020 was 2 trn rubles.
On February 16, the Central Bank of the Russian Federation placed COBR-40 (coupon bonds of the Bank of Russia) in the amount of 6.3 billion rubles with a buyback date on March 10, 2021 and with an average weighted yield of 4.22% per annum and the COBR-42 issue in the volume of 38.7 billion rubles with a buyback date on May 12, 2021 with a weighted average yield of 4.25% per annum. In addition, the Central Bank of the Russian Federation is preparing issues of COBR-43, COBR-44 and COBR-45 for a total of 900 billion rubles to be placed on March 9, April 21 and May 11, respectively.
On February 16, the Ministry of Finance of Azerbaijan issued medium-term bonds in the amount of 45 million manats ($ 26.5 million) with a maturity date of February 14, 2023, with an average weighted yield of 7.85% per annum. The yield on the previous issue with a similar maturity was 8.36%.
