State Treasury Bills Market
(May 2008)
In May, the Ministry of Finance increased the selling volumes of STB considerably. During the first three weeks in the STB primary market one could observe a noticeable growth of demand for STB, and STB profitability remained relatively stable. However, the first auction for the allocation of 6-months STB was considered unaccomplished due to the insufficient number of participants. Over the last two months, the demand for STB and primarily the demand for long-term STB reduced considerably due to the reduction of the activities of one of the participants in the market. Besides, the two auctions for 18-month STB placement have been called off due to the insufficient number of participants. This resulted in the increase of STB yield, and the increase of profitability on 12 and 24-day STB was higher in comparison with other STB.
On average, during the month the weighted average profitability on all STB types remained at the same level of 11.5 per cent.
In May, the weekly average volume of applications submitted by commercial banks has increased by 13.2 percent up to KGS 52.4 million, as compared to the numbers in the previous month. During the week the volume of sales has increased by 15.8 per cent on average and amounted to KGS 46.2 million. The share of long-term (12-month, 18-month and 24-month) STB in the structure of sales has increased from 83.2 to 84.6 per cent.
The overall STB volume in the circulation has increased in May by 3.2 per cent, and amounted to KGS 1,687.3 million as of the end of the month. Meanwhile, the maturity of bills has increased from 236 to 262 days. The amount of the net budget financing by STB means in May amounted to KGS 35.1 million.
The shares in the structure of STB holders of commercial banks, resident legal entities, and resident individuals remained at the same levels of 98.7, 0.4, and 0.9 per cent, correspondingly. The number of banks holding the State Treasury Bills remained the same. The bank portfolio concentration index for STB has increased from 0.18 till 0.25, which was equivalent to the presence of four banks with equal shares in the market, and indicated the high level of concentration.
The purchase-sale transactions were performed in the secondary STB market in May to the amount of KGS 437.5 thousand, and the weighted average profitability of those comprised 14.9 per cent.
The weekly placement of 9-month STB continued in May at the trading ground of the Closed JSC Kyrgyzskaya Fondovaya Birzha. The first two auctions has been acknowledged unaccomplished due to the existing unacceptable profitability for the issuer. On the whole, the transaction volume amounted to KGS 6.0 million over the reporting month, and the weighted average rate on the last auction comprised 13.6 per cent.
