State Treasury Bills Market
(July 2008)
In July, the Ministry of Finance of the Kyrgyz Republic considerably increased the demand volume (declared issue) of STB. At the same time, demand for bills under conditions of increasing level of excess liquidity in the banking system was also growing, however in total it lagged behind the supply. This affected the increase of STB profitability on all market sectors and the total weighted average profitability rate on all types of STB within a month constituted 16.1%, increasing by 2.9 percentage points.
The average weekly demand volume on the part of commercial banks in comparison with the previous month increased by more than 4 times and constituted 69.6 million soms. The Sales volume within a week also increased by 4 times and constituted 61.8 million soms. Herewith, in the structure of sales, the share of long-term bills (12-month, 18-month and 24-month STB) increased from 33.4-39.1%.
The overall volume of STB in circulation in the reporting month increased by 4.0% and constituted 1657.8 million soms by the end of month. Herewith the maturity of bills reduced by 22 days and constituted 241 days. The amount of net budget financing by means of STB constituted 62.8 KGS million in July.
The share of commercial banks in the structure of STB holders reduced from 98.0% to 97.4%, whereas the shares of resident legal entities and resident individuals increased to 1.1%. Moreover, in the reporting period, the share of institutional investors increased to 0.5%. The number of banks, holding the State Treasury Bills remained unchanged and constituted 19.
Herewith bank portfolio concentration index for STB decreased inconsiderably from 0.24 to 0.23 that testifies the high concentration level and is equal to the presence of four banks with equal shares in the market.
In July, in the secondary STB market, no STB purchase-sale bargain was concluded.
In the reporting period, at the trading ground of the Closed JSC ”Kyrgyzskaya Fondovaya Birzha”, the placement of 9-month STB was not performed.
