State barred from raising finance from the local market

In the first quarter of this year, the Ministry of Finance appealed to the local financial market to borrow funds through the issuance of bonds. Instead, the government has placed first overseas bonds at a higher interest rate than domestically.

Brokers say that there is a need in the market in the medium-and short-term Treasury bonds previously announced interest rates - from 3.75 to 4.5%. Investors are willing to buy the Central Bank in the amount of at least 50 million manat. However, it seems the government intends to cover the budget deficit only by external borrowing. In March this year were posted bonds totaling $ 1 billion 250 million at 5% per annum period of 10 years . In previous years, the Ministry of Finance in the local market has attracted at least 200 million manats.

According to the State Committee for Securities, in the first quarter of this year, government securities segment developed mainly due to one-day repo / repo - counter operations on the notes of the Central Bank . Investors (mainly financial institutions) have stepped up the volume of buying and selling of 2.4 times. Total share repurchase / counter- repo operations fell 82.1 % (3 289.5 million manat) exchange and OTC turnover CB in January-March this year. Compared with the same period in 2013 this figure rose by 0.7%.

The corporate market (564.2 bn) in the first quarter of this year increased 3.9 times. This is the result of placements by IBA and Capital Bank, as well as the secondary circulation of bonds Mortgage Fund under the Central Bank. On the corporate segment of the market OTC turnover of shares (7.2 million manat) decreased by 85%.

Just three months investors have concluded more than 1.5 thousand transactions on purchase and sale of corporate and government securities. This is 28% more than in the comparable period of 2013. - 08D-