OCTOBER 29 No 12 / 29! The USD/BGN exchange rate reaches its lowest level since August 28! Palpable rise in the repo deals volume throughout the month! The capital market turnover marks significant decline in October
DEBT MARKETS Benchmark yield curves in the euro area.29 and 2.11.29 8 7 annual yield (%) 6 5 4 3 2.29 2.11.29 1 o/n depo 1w depo 1m depo 3m bill 12m bill instrument 3y 5y 7y 1y Benchmark yield curves in Bulgaria.29 and 2.11.29 annual yield (%) 8 7 6 5 4 3 2 1.29 2.11.29 o/n depo 1w depo 1m depo 3m bill 12m bill instrument 3y 5y 7y 1y Bulgaria and euro area benchmark yield curves 2.11.29 7 6 Middle of SOFIBID and SOFIBOR annual yield (%) 5 4 3 2 SOFImid Bulgaria euro area 1 o/n depo 1w depo 1m depo 3m bill 12m bill 3y 5y 7y 1y instrument 2
Yields on EUR-denominated govt securities in Bulgaria and on the euro area curve 2.11.29 6 5 annual yield (%) 4 3 2 BG domestic BG global euro area 1 3m bill 12m bill 2y 3y 4y 5y 6y instrument 7y 8y 9y 1y 15y SOFIBOR and 3M T-bill issuance, January - October 29 (%) 1 9 8 7 6 5 4 3 2 1 1.1 16.1 31.1 15.2 1. MONEY MARKET 2.3 17.3 1.4 16.4 1.5 16.5 31.5 15.6 3.6 15.7 3.7 14.8 29.8 13.9 28.9 28.1 3M SOFIBID 3M SOFIBOR 3M T-bill LEONIA BIR In October the interbank money market monthly volume slightly decreased by 2.1 per cent below September to BGN 665.6 million, resulting from an 11. per cent decline in the deposit lending deals volume to BGN 557.2 No issuance of 3M government securities in October Vladimir Tsonchev (+359 2) 9145 1712 3
million, compensated by twofold rise in repo deals to BGN 18.5 million. In October the total monthly volume of term transactions in Euromoney market dealing increased compared to September. Here the rise is in depo deals volume by 16.1 per cent to BGN 4479.9 million, as well as in repo deals volume, 1.5 times, to BGN 231.6 million. The average daily excess reserves in October decreased to BGN 265 thousand after BGN 45874 thousand in September. In 19 calendar days altogether (from 2 nd till 4 th, and from 1 th till 25 th, including the holidays) of the month there was relative resource shortage (negative excess reserves). 8 Interbank money market and excess reserves, October 29 (BGN mln) 6 4 2-2 -4 2.1 5.1 6.1 8.1 9.1 12.1 money market 14.1 16.1 excess reserves Liquidity in the banking system is influenced every month by monetary flows through government securities (bills and s of the Ministry of Finance), and in October there was a net outflow from banks of BGN 65.1 million as a decrease in resources. Conversely, pension transfers let to increase of resources by BGN 683. million. 2.1 22.1 26.1 27.1 28.1 29.1 3.1 4
8 Deposit deals, October 29 (BGN mln) 7 6 5 4 3 2 1 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1 all deposit deals unsecured of which overnight secured 1.1. Interbank market: deposit lending and repo- transactions 1.1.1. Cash market Deposit lending maintains a prevailing share in the interbank money market volume, which for October amounts to 83.4 per cent of the interbank transactions, after 91.7 per cent in September. It is commercial banks main tool for managing current daily liquidity. 1.1.1.1. Unsecured market In October term unsecured deposit lending between market participants amounted to BGN 557.2 million, and 78.8 per cent of this (BGN 3987.3 million) were overnight deals, compared to 85.6 per cent share (BGN 4866.4 million) in September. 5
8 Unsecured deposit market, October 29 (BGN mln) 7 6 5 4 3 2 1 2.1 5.1 6.1 8.1 9.1 12.1 overnight 14.1 16.1 2.1 other 22.1 26.1 27.1 28.1 29.1 3.1 Commercial banks, via overnight transactions, provide additional resources at the beginning of every month for the regulation of required minimum reserves and in the middle of the month for clients payments. 1. LEONIA / EONIA.8.6.4.2. 2.1 5.1 6.1 8.1 9.1 12.1 14.1 LEONIA EONIA 6 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1
The monthly average for the overnight interest rate on unsecured deposit lending is an annual.62%,.84 percentage points lower than the BIR (base interest rate, effective from the first calendar day of each month and equal to the simple average of the LEONIA reference rate values from the previous month), 1.46% in October. 1.1.1.2. Secured market There is no secured deposit lending in October. The repo deals share is 16.6 per cent of the total transactions volume (BGN 18.5 million), after 8.3 per cent in September. 1.1.2. Derivatives market In October the monthly average of the LEONIA, a reference rate based on unsecured overnight deposit lending by 12 banks, decreased to.61%. Hence the size of the BNB base interest rate for November 29 is.61%. Not yet developed in the country. BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS BETWEEN BULGARIAN BANKS, OCTOBER 29 (in millions of the respective currencies) MARKETS: interbank money market euromoney market deals between Bulgarian banks TYPES OF DEALS: value in millions of BGN equivalent in millions of EUR value in millions of EUR equivalent in millions of BGN value in millions of USD equivalent in millions of BGN equivalent in millions of EUR equivalent in millions of BGN equivalent in millions of EUR unsecured deposit deals 557.2 2585.7 1731.9 3387.3 813.3 173.7 549. 19.2 9.8 secured deposit deals - - - - - - - - - repo of Bulgarian govt securities* 18.5 515.6 96.7 189.1 31.8 42. 21.5 - - outright purchases of short-term BGN Bulgarian govt securities - - - - - - - - - outright purchases of long-term** BGN Bulgarian govt securities* 133.9 68.5 - - - - - - - outright purchases of long-term** forex Bulgarian govt securities* 7.2 3.7 5.7 11.1 - - - - - * at market value; for repos - only the security purchase (money lending) leg ** s of over 1 year in original maturity Source: BNB, from commercial banks' daily reports deals in BGN deals in EUR deals in USD deals in other currencies 1.2. Outright purchases of securities on the secondary market On the interbank secondary market for government securities, the market value of outright purchases in October amounted to BGN 141.2 million (after BGN 64.2 million in September), and all the deals were with longer than 12 months securities. 7
On the Euromarket in October the total volume of outright purchases of government securities reached BGN 11.2 million, after BGN 1.5 million in September. 35 Outright deals in Bulgarian government securities, October 29 (BGN mln) 3 25 2 15 1 5 5.1 9.1 27.1 29.1 BGN-denominated securities up to 12M forex-denominated securities BGN-denominated securities over 12M 2. CAPITAL MARKET The following primary auctions of government securities were carried out by the Bulgarian National Bank as agent of the Ministry of Finance in October: - on 19th October for a batch of issue BG236113 (5Y treasury s) with a maturity date 25th of January 211, at the amount of BGN 35 million and 3.% annual interest; Boris Malinchev (+359 2) 9145 174 New placements of the 5Y government s - on 28th October for a batch of issue BG239117 (5Y treasury s) with a maturity date 18th of February 214, at the amount of BGN 3 million and 4.45% annual interest. 8
The monthly secondary market stock-exchange turnover of corporate s declines more than two times in October amounting to BGN 5.4 million (a daily average of BGN.2 million) compared to BGN 12.8 million in September. Off-stock-exchange are concluded deals in s at the amount of BGN 8.1 million. More significant turnover reached the s of CB Raiffeisenbank (Bulgaria) EAD (BGN 6. million). BSE transactions with s, October 29 (date T; BGN mln) 1 9 8 7 6 5 4 3 2 1 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1 official official OTC unofficial unofficial OTC The prices of EUR-denominated 213 gravitated around the 19% mark, and of USD-denominated 215 globals over jumped the 117% level. On the secondary market the price of the compensation instruments increases at the middle of the month to BGN.26 per item but at the end of the month declined to BGN.24 per item. The compensation instruments market turnover continues decreasing, amounting to BGN.4 million, compared with the BGN.9 million in September. 9
Deals concluded off-stock-exchange in October have insignificant amount. In October the market turnover of units in collective investment schemes remains weak and keeps its level from September - BGN.1 million. 5 4 3 2 1 2.1 5.1 6.1 BSE transactions with compensatories, October 29 (date T; BGN thousand) 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1 unofficial unofficial OTC privatis. (comp) 1
ASSET MARKETS 135 125 BG4 and SOFIX 55 5 115 45 15 4 NET ASSETS: 95 35 Equity 85 3 75 25 1.1.9 31.1.9 2.3.9 1.4.9 1.5.9 31.5.9 3.6.9 3.7.9 29.8.9 28.9.9 28.1.9 BG4 SOFIX (right scale) Real Estate Prices (BGN per sq. m.) 125 GROSS ASSETS: Real Estate (National Statistical Institute quarterly data) 12 115 11 15 1 95 9 85 8 1.1.9 1.4.9 1.7.9.9 16 Gold (XAU/BGN) 15 Commodities 14 13 12 11 1 1.29 2.293.29 4.29 5.29 6.29 7.29 8.29 9.29 1.29 1.6 Forex (USD/BGN) 1.55 1.5 Forex 1.45 1.4 1.35 1.3 1.25 1.2 1.29 2.293.29 4.295.29 6.29 7.29 8.29 9.29 1.29 11
EQUITY CAPITAL (NET ASSETS) Boris Malinchev (+359 2) 9145 174 BSE-SOFIA IPO MARKET (in millions of BGN) October 29 Issued securities Equities Bonds Rights Securities to be traded on: official market unofficial market official market unofficial market DEALS: Source: BSE-Sofia daily reports unofficial market TRADE IN SECURITIES REGISTERED ON THE BSE-SOFIA: STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) October 29 MARKETS INSTRUMENTS AND DEALS: BSE trading Official Market of Equities (segments A,B) EQUITY MARKETS Unofficial Market of Equities MARKET OF SPECIAL PURPOSE INVESTMENT COMPANIES BOND MARKETS Official Market of Bonds Unofficial Market of Bonds municipal s corporate s municipal s corporate s Market of compensation instruments OTHER MARKETS Market of Subscription Rights Market of Collective Investment Schemes of public companies of nonpublic companies Trade in primary instruments, of which: 11.5 11.7 4.3. 5.4.4..1 regular deals 11.5 11.7 4.3. 5.4.4..1 - - privatis. market deals (cash) - - - - - - - - Privatis. market (compensative)* - - - - - - - - INSTRUMENTS AND DEALS: - OTC trading Trade in primary instruments (block, registration, repo, tender purchases, redemption, etc.)** 1.9 6..9 8.1..7 - - Source: BSE-Sofia daily reports * Not included in the above totals ** From 16 June 28 off-stock-exchange trade is not reported by type of deals due to introduction of new trading platform XETRA Trade in equities not registered on the BSE- Sofia The Bulgarian Stock Exchange Sofia (BSE-Sofia) monthly turnover in equities in October marks more than two times decrease amounting to BGN 27.5 million (a daily average of BGN 1.2 million), compared to BGN 61.2 million in September. The turnover in deals concluded off-stock-exchange (reported through the stock-exchange platform) amounts to BGN 8.8 million. More significant volumes reaches the trade in shares of Prime Property BG SIPC (BGN 7.5 million). From September 1 st the segmentation of the Unofficial Market of Equities was terminated 12
BSE transactions with shares, October 29 (date T; BGN mln) 5 45 4 35 3 25 2 15 1 5 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1 The prices of the Bulgarian stock market during the month show a trend similar to those of the regional and leading world stock markets. privatis.(bgn) SIPC OTC SIPC unoff. OTC unoff. official OTC official DAX, SOFIX and BET, October 29 6 55 55 5 45 4 35 3 25 2 15 1 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 28.1 29.1 3.1 DAX BET SOFIX (right scale) 5 45 4 35 3 25 2 15 1 13
BG4, October 29 14 13 12 11 1 9 8 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 Pension fund price indices, October 29 (1 July 24 BGN 1) 28.1 29.1 3.1 1.25 1.2 1.15 1.1 1.5 1. 2.1 3.1 4.1 5.1 6.1 8.1 9.1 VOLIDEX PROFIDEX UNIDEX 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 14
There are no placements of shares on the IPO market of the BSE-Sofia in October. BSE primary market, October 29 (date T; BGN thousand) 1 8 6 4 2 2.1 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 22.1 26.1 27.1 shares rights/shares govt sec. s 3. FOREIGN EXCHANGE MARKET In October 29 the USD exchange rate against BGN continues to decline and it was moving between the values of 1.34542 on 2 October and 1.3215 on 23 October. The average USD exchange rate for the month was 1.3216, which again is lower with more than.2 BGN in comparison with the previous month s value. 28.1 29.1 3.1 Lubomir Tonev (+359 2) 9145 168 Plamen Petrunov (+359 2) 9145 161 1.36 Daily BNB reference exchange rate for the USD, October 29 (BGN per USD 1) 1.35 1.34 1.33 1.32 1.31 1.3 1.29 2.1 3.1 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 15 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1
5 45 4 35 Daily USD turnover and exchange rates of (commercial) banks, October 29 1.36 1.34 USD mln 3 25 2 15 1 5 2.1 traded between banks sold to customers average rate for sales to customers 5.1 6.1 8.1 9.1 12.1 14.1 16.1 2.1 Total monthly foreign exchange market turnover, October 28 to October 29 (in mln of EUR) 22.1 26.1 27.1 28.1 29.1 3.1 1.32 1.3 1.28 1.26 bought from customers average rate for purchases from customers average interbank rate BGN per USD 1 October-9 September-9 August-9 July-9 June-9 May-9 April-9 March-9 February-9 January-9 December-8 November-8 October-8 38,96.6 36,765.4 42,8.1 47,25.2 49,818.9 39,142.6 44,43.3 44,854.7 44,675.6 41,935.7 48,298.3 53,238.6 56,876.8 In October the total turnover of the foreign exchange market reaches EUR 3896.6 million at the average daily turnover of EUR 1731.6 million. The pure interbank turnover (without BNB) is, in euro terms, EUR 44.2 million the lowest level since September 27. The USD trade between the banks, as in the previews month stays weak, 16
reaching USD 7.6 million, which is 11.6 percent of interbank foreign exchange trading. Foreign exchange trading between (commercial) banks, October 28 to October 29 (in mln of EUR) October-9 September-9 August-9 July-9 June-9 May-9 April-9 March-9 February-9 January-9 December-8 November-8 October-8 44.2 64.3 78.3 75. 67. 52.3 78.4 18.5 89.9 72.5 97.2 133.2 194.9 October-9 September-9 August-9 July-9 June-9 May-9 April-9 March-9 February-9 January-9 December-8 November-8 October-8-12446 -12952-11517 Monthly EUR trading between BNB and banks, October 28 to October 29 (EUR mln) -1841-129 -1444-152 -1171-9686 -8624-934 -9649-8338 26-95 -77-176 -264-397 -336-433 -312-283 121 35 2 8745 8373 9712 1746 11537 8957 133 118 115 9313 1639 12134 12669 bought from banks sold to banks net 17
3 Foreign exchange trading between (commercial) banks, October 29 (in mln of EUR) 25 2 15 1 5 2.1 3.1 1.99984 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 EUR exchange rate, October 29 (BGN per EUR 1) 1.95583 1.91182 2.1 3.1 BNB (comm.) banks from customers 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 interbank (comm.) banks to customers On the interbank market, the BNB purchased EUR 8744.6 million and sold EUR 8623.7 million, accounting positive balance of EUR 12.9 million. The BNB sold to budgetary organisations foreign exchange equal to EUR 18.3 million, which exceeded their purchases by EUR 13. million. 18
14 Daily EUR turnover of (commercial) banks, October 29 (EUR mln) 12 1 8 6 4 2 8 2.1 3.1 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 traded between banks bought from customers sold to customers Daily EUR trading between BNB and banks, October 29 (EUR mln) 6 4 2-2 -4-6 -8 2.1 3.1 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 spot value - net tommorow value same day value The turnover of the banks with their final customers reached EUR 3246.7 million. The amount of foreign exchange that the banks purchased (equal to EUR 1666.1 19
million) exceeded their sales (EUR 158.6 million) by EUR 85.5 million. Non-bank financial institutions trading in foreign exchange in the territory of the state declined notable. Purchased foreign exchange is equal to EUR 83.1 million and sold foreign currencies is equal to EUR 69.4 million. 2 Foreign exchange trading of (commercial) banks with customers, October 29 (in mln of EUR) 15 1 5-5 -1-15 -2 2 15 1 5-5 -1-15 -2 2.1 3.1 4.1 2.1 3.1 4.1 5.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 bought from customers sold to customers net Foreign exchange trading of (commercial) banks with nonresidents, October 29 (in mln of EUR) 5.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 6.1 8.1 9.1 1.1 11.1 12.1 14.1 16.1 17.1 18.1 2.1 22.1 24.1 25.1 26.1 27.1 28.1 29.1 3.1 bought from nonresidents sold to nonresidents net 2
Foreign exchange market October 29 (in mln of EUR) Purchases Sales Balance Interbank market (commercial banks) 44.2 44.2. (Commercial) banks with customers 1666.1 158.6 85.5 - of which: with nonresidents 72.9 75.2-2.3 BNB total 875. 8643.3 16.7 BNB with banks 8744.6 8623.7 12.9 of which: *with banks - SPOT 116.5 8561.6-8445.1 *with banks - TOM 1.4. 1.4 *with banks - TODAY 8626.7 62.1 8564.6 *with banks - NOTES... BNB transactions with budgetary organisations 5.3 18.3-13. BNB notes operations at counters.1 1.3-1.2 Source: BNB, from banks and BNB s daily reports Currency structure of forex trading: total and for some participants, October 29 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1 2 3 4 1-total (BNB, banks, customers); 2-interbank (without BNB); 3-(commercial) banks with customers; 4-forex trading of non-bank financial intermidiaries Others USD EUR 21
Forex swaps and forwards in EUR terms (estimate) FX swap and forward transactions - (commercial) banks with final customers (in mln of EUR) Purchases Sales Balance October 29 1417.6 1522.4-14.8 - of which: with nonresidents 1222.3 1336.1-113.8 FX structure (percentige) EUR 98.2 98.8 Others 1.8 1.2 Interbank FX swap and forward transactions (commercial banks) (in mln of EUR) Purchases Sales Balance October 29 3.1 3.1. FX structure (percentige) EUR 99.6 99.6 GBP.4.4 The figures for foreign exchange swap deals include both the sales of foreign currecies for BGN and the subsequent purchase operations. Source: BNB, from banks daily reports TENDENCES Short-term expectations: money market rates to remain stable; the indices of the BSE to continue fluctuating following the trend of the leading world stock markets; USD/BGN to move within 1.33-1.3. 22