Kazakhstan
Bonds of the Ministry of Finance of the Republic of Kazakhstan. Last week, the Ministry of Finance of the Republic of Kazakhstan placed 6 bond issues for a total of KZT55.1bn (KZT45.8bn in the previous week). Despite a moderate demand, primary market bonds’ yield continued to decline, dropping 2-15 bps for bonds with a maturity of less than 2.5 years and for 27-40 - for longer ones. Last week, the Ministry of Finance redeemed bonds in the amount of KZT15bn.
The placements of the Ministry of Finance in February totaled KZT238bn, (KZT274bn in January), whilst it was planned to raise only KZT165bn. The Ministry of Finance plans to raise KZT180bn in March.
It should be noted that since November 2020, the UAPF has ceased to buy securities of the Ministry of Finance. The investments in the bonds of Ministry of Finance since then remains unchanged at KZT4.9tn (as of February 1, 2021). Instead, the UAPF has increased the deposits with the NBK from almost of a zero to KZT489bn. In the same period, the internal public debt increased by T415bn from KZT9.34tn to KZT9.75tn. In the absence of the UAPF in the government securities market of the MoF, it was distributed among other investors, including banks and non-residents.
National Bank’s notes. Last week, the National Bank placed a 28-day issue of the notes at KZT489bn with a yield of 8.9899% (9.0096% on February 15). The yield plunged below 9% for the first time since 1H2019. The demand was practically in line with the supply. Last week, the National Bank redeemed 28-day notes for a total amount of KZT387 billion.
The National Bank's notes held by non-residents as of 19.02.21 amounted to KZT520bn, having increased by 49% YTD. The share of non-residents amounted to 14% of the total notes in circulation (11.5% at the beginning of the year).
Corporate issuers' instruments. On February 24, Kazakhstan Housing Company JSC raised KZT14.3bn at KASE by placing 5-year bonds with a YTM of 11%. Demand amounted to 49% of the announced supply.
The regional market
On February 23, the Central Bank of the Russian Federation placed COBR-42 (coupon bonds of the Bank of Russia, which are placed among Russian credit institutions) in the amount of 2.4 billion rubles with a buyback date on May 12, 2021 and with an average weighted yield of 4.24% per annum. The previous COBR-42 issue in 38.7 billion rubles took place last week with a weighted average yield of 4.25% per annum. The Central Bank's auctions of KOBR-40 and KOBR-41, which were also held last week, were declared as failed. Decrease in placements and failed auctions may indicate a decline of the demand of financial institutions for short instruments of the Central Bank of the Russian Federation at the proposed rates.
On February 23, the Ministry of Finance of Azerbaijan issued medium-term bonds in the amount of AZN20 million ($11.8 million), with a circulation period of 78 days and with an average weighted yield of 8.47% per annum. On January 27, 2021, bonds were placed with a similar volume, maturity and weighted average yield of 8.33% per annum.
On February 23, the Ministry of Finance of Georgia issued 5-year benchmark bonds in the amount of 35 million lari ($ 10.5 million) with an average weighted yield of 8.02% per annum. The yield on the previous issue of benchmark bonds with a similar maturity was 8.11%.
