> Decrease in the money market volume in April

APRIL 29 No 5 / 29 > From 1 st April the BNB allowed the commercial banks to buy EUR also with value date today > Decrease in the money market volume in April

DEBT MARKETS Benchmark yield curves in the euro area.29 and.29 8 7 annual yield (%) 6 5 4 3 2.29.29 1 o/n depo 1w depo 1m depo 3m bill 12m bill 3y 5y 7y 1y instrument Benchmark yield curves in Bulgaria.29 and.29 8 7 annual yield (%) 6 5 4 3 2.29.29 1 o/n depo 1w depo 1m depo 3m bill 12m bill 3y 5y 7y 1y instrument Bulgaria and euro area benchmark yield curves.29 annual yield (%) 8 7 6 5 4 3 2 1 Middle of SOFIBID and SOFIBOR SOFImid Bulgaria euro area 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.29 7 6 annual yield (%) 5 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 9 SOFIBOR and 3M T-bill issuance, January - April 29 (%) 8 7 6 5 4 3 2 5.1 1.1 15.1 2.1 25.1 1. MONEY MARKET 3.1 4.2 9.2 14.2 19.2 24.2 1.3 6.3 11.3 16.3 21.3 26.3 31.3 5.4 1.4 2.4 25.4 3M SOFIBID 3M SOFIBOR 3M T-bill LEONIA BIR In April the interbank money market monthly volume decreased by 9.7 per cent below March to BGN 8767.5 million, resulting from a 8.6 per cent decline in the deposit lending deals volume to BGN 837.4 million, and from a 19.8 per cent drop in repo deals to BGN 73.1 million. Vladimir Tsonchev (+359 2) 9145 1712 No issuance of 3M government securities in April 3

In April the total monthly volume of term transactions in Euromoney market dealing increased compared to March, but the increase here is only in depo deals volume by 15.8 per cent to BGN 5148.7 million. In repo deals volume there was a decrease by 3. per cent to BGN 492.9 million. The average daily excess reserves in April decreased to BGN -25569 thousand after BGN 43411 thousand in March. This daily average shortage results from the difference between the periods of estimation minimum required reserves are regulated in a maintenance period, from 4th April till 3rd May, differing from the calendar month, where days from previous maintenance period are counted. In 21 calendar days altogether (from 1 st till 5 th, and from 13 th till 28 th, including the holidays) of the month there was relative resource shortage (negative excess reserves). 8 Interbank money market and excess reserves, April 29 (BGN mln) 6 4 2-2 -4 1.4 13.4 money market 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 April there was a net outflow from banks of BGN 25.9 million as a 4

decrease in resources. Pension transfers amounted to BGN 63. million as an increase in resources. 8 Deposit deals, April 29 (BGN mln) 7 6 5 4 3 2 1 1.4 13.4 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 April has increased to 91.7 per cent of the interbank transactions, after 9.6 per cent in March. It is (commercial) banks main tool for managing current daily liquidity. 1.1.1.1. Unsecured market In April term unsecured deposit lending between market participants amounted to BGN 837.4 million, and 84.1 per cent of this (BGN 6755.8 million) were overnight deals. 5

8 Unsecured deposit market, April 29 (BGN mln) 7 6 5 4 3 2 1 1.4 13.4 overnight other 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. 5. LEONIA / EONIA 4.5 4. 3.5 3. 2.5 2. 1.5 1..5. 1.4 13.4 LEONIA EONIA 6

The monthly average for the overnight interest rate on unsecured deposit lending is an annual 2.28%, 1.25 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), 3.53% in April. 1.1.1.2. Secured market There is no secured deposit lending in April. The repo deals share decreased to 8.3 per cent of the total transactions volume (BGN 73.1 million), after 9.4 per cent in March. 1.1.2. Derivatives market Not yet developed in the country. In April the monthly average of the LEONIA, a reference rate based on unsecured overnight deposit lending by 12 banks, decreased to 2.27%. Hence the size of the BNB base interest rate for May 29 is 2.27%. BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS BETWEEN BULGARIAN BANKS, APRIL 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 837.4 419.5 258.3 425.7 73.9 182.4 553.4 41.5 21.2 secured deposit deals - - - - - - - - - repo* of Bulgarian govt securities 73.1 373.3 232.4 454.5 25.9 38.4 19.6 - - outright purchases of short-term BGN Bulgarian govt securities - - - - - - - - - outright purchases of long-term** BGN Bulgarian govt securities 19.4 9.9 - - - - - - outright purchases of long-term** forex Bulgarian govt securities.. 1.1 2.2 2.6 3.9 2. - - * 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 volume of outright purchases in April amounted to BGN 19.4 million (after BGN 25.6 million in March), and all the deals are with longer than 12 months securities. 7

On the Euromarket in April the total volume of outright purchases of government securities reached BGN 5.8 million after BGN 13.6 million in March. 12 Outright deals in Bulgarian government securities, April 29 (BGN mln) 1 8 6 4 2 1.4 13.4 BGN-denominated securities up to 12M forex-denominated securities BGN-denominated securities over 12M 2. CAPITAL MARKET The following primary auction of government securities were carried out by the Bulgarian National Bank as agent of the Ministry of Finance in April: - on 6th April for a batch of issue BG249214 (1Y treasury s) with a maturity date 28th of January 219, at the amount of BGN 35 million and 4.95% annual interest. Boris Malinchev (+359 2) 9145 174 New placement of the 1Y government s The monthly secondary market stock-exchange turnover of corporate s marked more than a twofold decrease in April amounting to BGN 16.3 million (a daily average of BGN.9 million) compared to BGN 34.3 million in March. 8

Off-stock-exchange were concluded deals in s at the amount of BGN 1.3 million. BSE transactions with s, April 29 (date T; BGN mln) 1 9 8 7 6 5 4 3 2 1 official official OTC unofficial unofficial OTC The prices of EUR-denominated 213 globals reached the 15% mark, and of USD-denominated 215 globals went up above the 16% level. On the secondary market the price of the compensation instruments declined to BGN.24 per item. The compensation instruments market turnover continued being small amounting to BGN.4 million, at the same amount as in March. Deals concluded off-stock- exchange in April had insignificant amount. BSE transactions with compensatories, April 29 (date T; BGN thousand) 5 4 3 2 1 unofficial unofficial OTC privatis. (comp) 9

ASSET MARKETS 115 BG4 и SOFIX 4 11 15 1 35 95 NET ASSETS: 9 85 3 Equity 8 75 5.1.9 12.1.9 19.1.9 26.1.9 2.2.9 9.2.9 16.2.9 23.2.9 BG4 2.3.9 9.3.9 16.3.9 23.3.9 3.3.9 SOFIX (дясна скала).9 13.4.9 2.4.9.9 25 GROSS ASSETS: Real Estate (National Statistical Institute quarterly data) Real Estate Prices (BGN per sq. m.) 125 12 115 11 15 1 95 9 85 8 5.1.9 19.1.9 2.2.9 16.2.9 2.3.9 16.3.9 3.3.9 13.4.9.9 16 Gold (XAU/BGN) 15 Commodities 14 13 12 11 1 1.29 2.29 3.29 4.29 1.6 Forex (USD/BGN) 1.55 Forex 1.5 1.45 1.4 1.29 2.29 3.29 4.29 1

EQUITY CAPITAL (NET ASSETS) Boris Malinchev (+359 2) 9145 174 BSE-SOFIA IPO MARKET (in millions of BGN) April 29 Issued securities Equities Bonds Rights Securities to be traded on: official market unofficial market official market unofficial market unofficial market DEALS: Source: BSE-Sofia daily reports TRADE IN SECURITIES REGISTERED ON THE BSE-SOFIA: STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) April 29 MARKETS INSTRUMENTS AND DEALS: BSE trading Official Market of Equities EQUITY MARKETS MARKET OF BOND MARKETS OTHER MARKETS Trade in equities not Unofficial Market Official Market of Bonds Unofficial Market of registered on the BSEof Equities Bonds Sofia SPECIAL PURPOSE INVESTMENT COMPANIES (segments A,B) (segments A,B) municipal s corporate s municipal s corporate s Market of compensation instruments Market of Subscription Rights Market of Collective Investment Schemes of public companies of nonpublic companies Trade in primary instruments, of which: 2.9 36.7 14.8 16.3.4 2.8 regular deals 2.9 36.7 14.8 16.3.4 2.8 - - privatis. market deals (cash) - - - - - - - - Privatis. market (compensative)* - - - - - - - - INSTRUMENTS AND DEALS: - OTC trading Trade in primary instruments (block, registration, repo, tender purchases, redemption, etc.)** 29.3 3.1 2.8 1.3..4 - - 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 The Bulgarian Stock Exchange Sofia (BSE-Sofia) monthly turnover in equities in April decreased by about 43% amounting to BGN 72.4 million (a daily average of BGN 3.8 million), compared to BGN 126. million in March. More significant turnover had the trade in shares of Intersky AD Lesnovo (BGN 22.6 million). The turnover in deals concluded off-stock-exchange (reported through the stock-exchange platform) amounted to BGN 35.2 million. From this turnover BGN 22.6 million were a result of deals with shares of Albena Invest Holding AD. 11

BSE transactions with shares, April 29 (date T; BGN mln) 35 3 25 2 15 1 privatis.(bgn) SIPC OTC SIPC unoff. OTC unoff. official OTC official 5 The prices of the Bulgarian stock market during the month in general showed relatively bigger volatility compared with the prices of the leading world stock markets. DAX, SOFIX and BET,April 29 55 55 5 45 4 35 3 25 2 15 1 DAX BET SOFIX (right scale) 5 45 4 35 3 25 2 15 1 12

BG4, April 29 12 11 1 9 8 Pension fund price indices, April 29 (1 July 24 BGN 1) 1.16 1.14 1.12 1.1 1.8 1.6 1.4 1.2 4.4 5.4 VOLIDEX PROFIDEX UNIDEX There were no placements of shares on the IPO market of the BSE-Sofia in April. 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 13

BSE primary market, April 29 (date T; BGN thousand) 1 8 6 4 2 shares rights/shares govt sec. s 3. FOREIGN EXCHANGE MARKET In April 29 the USD exchange rate against BGN was moving between the values of 1.44919 on 6 April and 1.5124 on 21 April. The average USD exchange rate was 1.4888, which is more then.1 BGN lower than the previous month s value. Lubomir Tonev (+359 2) 9145 168 Plamen Petrunov (+359 2) 9145 161 1.54 Daily BNB reference exchange rate for the USD, April 29 (BGN per USD 1) 1.52 1.5 1.48 1.46 1.44 1.42 4.4 5.4 1.4 11.4 12.4 13.4 14 18.4 19.4 2.4 25.4 26.4

6 Daily USD turnover and exchange rates of (commercial) banks, April 29 1.55 5 4 1.5 USD mln 3 2 1 traded between banks sold to customers average interbank rate 1.4 13.4 Total monthly foreign exchange market turnover, April 28 to April 29 (in mln of EUR) 1.45 1.4 1.35 bought from customers average rate for purchases from customers average interbank rate BGN per USD 1 April-9 March-9 February-9 January-9 December-8 November-8 October-8 September-8 August-8 July-8 June-8 May-8 April-8 44,43.3 44,854.7 44,675.6 41,935.7 48,298.3 53,238.6 56,876.8 47,747.4 47,432.7 51,535.6 46,982.1 4,544.8 47,667.7 In April the total turnover of the foreign exchange market reached EUR 4443.3 million. The average daily turnover was EUR 2114.4 million. The interbank turnover (without BNB) was, in euro terms, EUR 78.4 million. The USD trade between (commercial) banks was USD 23. million and 15

comprised 22.2 percent of interbank foreign exchange trading. Foreign exchange trading between (commercial) banks, April 28 to April 29 (in mln of EUR) April-9 78.4 March-9 18.5 February-9 89.9 January-9 133.2 December-8 72.5 November-8 97.2 October-8 194.9 September-8 141.2 August-8 175.3 July-8 212.2 June-8 145. May-8 141.4 April-8 84.6 Monthly EUR trading between BNB and banks, April 28 to April 29 (EUR mln) April-9 March-9 February-9 January-9 December-8 November-8 October-8 September-8 August-8 July-8 June-8 May-8 April-8-129 -1444-152 -9649-1171 -12446-12952 -1664-1118 -11421-141 -8947-141 -176-264 -397-336 -433-312 -283-48 664 214 232 26 425 133 118 115 9313 1639 12134 12669 1616 1782 11635 1642 927 1826 bought from banks sold to banks net 16

3 Foreign exchange trading between (commercial) banks, April 29 (in mln of EUR) 25 2 15 1 5 1.99984 4.4 5.4 EUR exchange rate, April 29 (BGN per EUR 1) 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 1.95583 1.91182 BNB (comm.) banks from customers 4.4 5.4 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 interbank (comm.) banks to customers On the interbank market, the BNB purchased EUR 132.9 million and sold EUR 128.7 million. The amount of foreign exchange that the BNB purchased from budgetary organizations (equal to EUR 138.6 million), exceeded BNB sales (equal to EUR 21.9 million) by EUR 116.7 million. 17

25 Daily EUR turnover of (commercial) banks, April 29 (EUR mln) 2 15 1 5 8 4.4 5.4 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 traded between banks bought from customers sold to customers Daily EUR trading between BNB and banks, April 29 (EUR mln) 6 4 2-2 -4-6 -8 4.4 5.4 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 spot value - net tommorow value same day value The trade between (commercial) banks and customers amounted to EUR 3599.7 million, preserving the level from the previous month. The amount of foreign exchange that the banks sold (equal to EUR 1852.5 million) 18

exceeded their purchases (equal to EUR 1747.2 million) by EUR 15.3 million. Non-bank financial intermediaries, licensed by the BNB for foreign exchange trading, purchased foreign exchange equal to EUR 79. million and sold foreign currencies equal to EUR 81.9 million. 22 18 14 1 6 2-2 -6-1 -14-18 -22 22 18 14 1 6 2-2 -6-1 -14-18 -22 Foreign exchange trading of (commercial) banks with customers, April 29 (in mln of EUR) 4.4 4.4 5.4 1.4 11.4 12.4 13.4 18.4 19.4 2.4 bought from customers sold to customers net Foreign exchange trading of (commercial) banks with nonresidents, April 29 (in mln of EUR) 5.4 25.4 26.4 1.4 11.4 12.4 13.4 18.4 19.4 2.4 25.4 26.4 bought from nonresidents sold to nonresidents net 19

Foreign exchange market April 29 (in mln of EUR) Purchases Sales Balance Interbank market (commercial banks) 78.4 78.4. (Commercial) banks with customers 1747.2 1852.5-15.3 - of which: with nonresidents 152. 65.6 86.4 BNB total 1171.6 1233.8-62.2 BNB with banks 132.9 128.7-175.8 of which: *with banks - SPOT 74. 159.7-9985.7 *with banks - TOM... *with banks - TODAY 9958.9 149. 989.9 *with banks - NOTES... BNB transactions with budgetary organisations 138.6 21.9 116.7 BNB notes operations at counters.1 3.2-3.1 Source: BNB, from banks and BNB s daily reports Currency structure of forex trading: total and for some participants, April 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 2

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 April 29 1734.6 1985.8-251.2 - of which: with nonresidents 1443.7 1717.7-274. FX structure (percentige) EUR 94. 95.8 USD 6. 4.2 Interbank FX swap and forward transactions (commercial banks) (in mln of EUR) Purchases Sales Balance April 29 52. 52.. FX structure (percentige) EUR 1. 1. USD.. 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: With the usual volumes, money market rates to stay without a significant change; Тhe SOFIX to continue fluctuating; USD/BGN to move within 1.47-1.42. 21