24 May 2004 04:47
Trading still thin on govt. debt market
MOSCOW. May 24 (Interfax) - Trading was again thin on a still illiquid government debt market, where volume was a
mere 346.691 million rubles and average weighted yield fell 0.29% to 6.89% annually.
OFZ-AD 46001 maturing in 2008 took 55% of the trading and OFZ-AD 46002 maturing in 2012 took 35%.
But prices have become attractive to rank-and-file investors after their sustained period of decline. OFZ-AD 46014
amortization bonds maturing in 2018 yielded 7.91% on Monday, but this was not enough to spark off increased buying.
Dealers said investors were not rushing to buy ruble-denominated debt because ruble liquidity was sparse in the
banking system. This is driving up the cost of credits on the money market and limiting opportunities to buy OFZ.
In addition, the ruble is not strengthening as much against the dollar and ruble-denominated financial instruments
are becoming less appealing.
Finally, OFZ supply on the secondary market is not always plentiful and investors are not willing to buy bonds from
the Finance Ministry unless these are offered at a premium.
All of this combines to produce a market where trading is extremely thin and where clear trends are yet to
emerge.
The biggest advancers Monday were OFZ-AD 46003 maturing in 2010, which gained 35 basis points to 111.98% of
face-value, moreover the day saw just one transaction in these papers totaling 23,516 rubles.
OFZ-AD gained 33 basis points to 106.33% in 21 transactions totaling 15.176 million rubles.
Bonds in which trading volume was highest did not move much in price: OFZ-AD 46001 gained just 6 basis points to
110.46% in volume of 189.366 million rubles, and OFZ-AD 46002 were up 9 basis points in volume of 119.813 million
rubles.
Monday's two direct repo auctions with OFZ saw bonds totaling 5.395 billion rubles sold, with yields averaging
7.58% at one and 7.6% at the other in another indication that banks are short on rubles, that corespondent account
balances with the CB are low and that money market rates are high.
No significant changes are in store for Tuesday, dealers said. [RU ASIA EUROPE EEU EMRG GVD INSI] pr
[Interfax] |
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