11 May 2004 10:02
OFZ prices tumble Tuesday
MOSCOW. May 11 (Interfax) - Prices for OFZ bonds tumbled on Tuesday.
Interest rate hikes on world markets and revaluation of the ruble growth rate against the dollar are the two
fundamental factors behind the drop in prices, said Anastasia Shamina of Zenit bank. Positive employment figures from
the United States, which were released Friday, increased the likelihood that interest rates would go up this summer and
triggered an increase in yield for U.S. T-bills, a guideline for emerging market debt instruments. Quotes for Russian
Eurobonds plunged and this had a negative impact on domestic debt bonds.
The domestic debt market was not hit as hard as the forex bonds
market because liquidity is low on the OFZ market and major players
prevail on it. Banks use OFZ to meet Central Bank liquidity norms,
Dollar growth against the ruble is also helping to push OFZ prices down.
increasing demand for these bonds and helping to make the market more stable.
The largest decline among the OFZ bonds on Tuesday was 159 basis points for OFZ 46001 (maturing in September 2008)
and 116 basis points for OFZ 46014 (maturing August 2018). Yield for the bonds increased to 7.08% and 8.05%,
respectively.
OFZ 45001 bonds (maturing in November 2006) fell 18 basis points to 109.46% and yield was 5.06%.
OFZ 45002 bonds (maturing in August 2012) were an exception with average prices jumping 90 basis points. Analysts
point out that the price climbed due to one large transaction at 112.48% of face value, while other transactions were
made at 108.4% to 108.8%.
There were no GKO deals.
Analysts say prices will continue to slide Wednesday in light
Deals with the remaining OFZ bonds were few and far between.
Trading volume increased to 1.05 billion rubles.
Weighted average yield for OFZ-FD and OFZ-AD bonds grew 3.23% to 6.71%.
trading. [RU ASIA EUROPE EEU EMRG GVD INSI] me
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