JUNE 213 No 7 / 213 > Higher interbank money market volumes at unchanged interest rate levels > The еuro with a three-month high against the dollar in June > Growth of the main index SOFIX by more than 3% accompanied with low trade turnover in shares on the BSE-Sofia
DEBT MARKET Benchmark yield curves in the euro area 31.5.213 and 1.7.213 6 annual yield (%) 5 4 3 2 1 31.5.213 1.7.213 o/n depo 1w depo 1m depo 3m depo 12m bill instrument 3y bond 5y bond 7y bond 1y bond Benchmark yield curves in Bulgaria 31.5.213 and 1.7.213 6 5 annual yield (%) 4 3 2 1 31.5.213 1.7.213-1 o/n depo 1w depo 1m depo 3m depo 12m bill instrument 3y bond 5y bond 7y bond 1y bond Bulgaria and euro area benchmark yield curves 1.7.213 6 5 annual yield (%) 4 3 2 1 Bulgaria euro area -1 o/n depo 1w depo 1m depo 3m depo 12m bill 3y bond 5y bond 7y bond 1y bond instrument Middle of Sofibid and Sofibor 2
Yields on EUR-denominated govt securities in Bulgaria and on the euro area curve 1.7.213 7 6 annual yield (%) 5 4 3 2 1 BG domestic BG global euro area -1 3m depo 12m bill 2y bond 3y bond 4y bond 5y bond 6y bond 7y bond 8y bond 9y bond 1y bond 15y bond instrument SOFIBOR and 3M T-bill issuance, January - June 213 (%) 5 4.5 4 3.5 3 2.5 2 1.5 1.5 2.1 12.1 22.1 1.2 11.2 21.2 3.3 13.3 23.3 2.4 12.4 22.4 2.5 12.5 22.5 1.6 11.6 21.6 3M SOFIBID 3M SOFIBOR 3M T-bill LEONIA BIR 1. MONEY MARKET In June the interbank money market volume increased, with the daily average pointing at the highest level for the Plamen Petrunov (+359 2) 9145 161 Vladimir Tsonchev (+359 2) 9145 1712 year so far. Interest rates however, remained unchanged at record lows, amid abundant liquidity in the banking system. 3
6 Interbank Money Market, volumes (BGN mln) 5 4 3 2 1 January 213 February 213 deposit deals March 213 April 213 May 213 June 213 repo deals The monthly volume of the domestic money market increased by 21.1 per cent to BGN 482. million. The deposit deals volume rose by 28.9 per cent to BGN 321.3 million, and the repo-deals volume gained 7.9 per cent, climbing to BGN 1591.7 million. Increase in domestic interbank volumes - in the deposit lending deals, as well as, in the repodeals The monthly volume of the euromoney market term transactions decreased again, this time by 18.1 per cent, and reached BGN 263.5 million. The deposit deals volume in all currencies (EUR, USD and GBP) fell by 18.7 per cent to BGN 2611.6 million. The repo deals volume, which remained negligibly small, decreased by 3. per cent to BGN 18.9 million. and a drop in the euromoney market turnover 35 3 25 2 15 1 5 Interbank Euromoney Market, volumes (BGN equivalent in mln) EUR EUR EUR USD USD USD Other Other Other April 213 May 213 June 213 April 213 May 213 June 213 April 213 May 213 June 213 deposit deals repo deals 4
The banking system remained highly liquid. Тhe average daily excess reserves in June reached BGN 275.4 million, following BGN 421.9 million in May (excess reserves were calculated taking into account a calendar month, and not the actual maintenance period from the 4 th of each month till the 3 rd of the next). There were only two days throughout the month with negative excess reserves for the system, which came mainly from regular transfers to the budget. The liquidity in the banking system remained substantial 1, excess reserves Interbank money market and excess reserves, June 213 (BGN mln) money market 8 6 4 2-2 Liquidity in the banking system is also influenced every month by: (1) monetary flows through government securities (bills and bonds of the Ministry of Finance), which in June resulted in a net outflow from banks of BGN 33.8 million; and (2) pension transfers, which in June led to an increase in resources by BGN 769.3 million. 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 5
35 Deposit Deals, June 213 (BGN mln) 3 25 2 15 1 5 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 all deposit deals unsecured of which overnight secured 28.6 1.1. Interbank market: deposit lending and repo- transactions Deposit lending maintained a prevailing share in the interbank money market volume (deposit lending and repo-deals), as for June this share continued increasing reaching 66.9 per cent of the interbank transactions, following 62.8 per cent in May. Unsecured market In June term unsecured deposit lending between market participants amounted to BGN 321.3 million and 86. per cent of these (BGN 2762.3 million) were overnight deals. This share remained fairly stable compared to May, where 84.3 per cent (BGN 299. million) of the deals were overnight. 6
Maturity breakdown of the unsecured interbank trades 1% 8% 6% 4% ` 2% % Jun'12 Aug'12 Oct'12 Dec'12 Feb'13 Apr'13 Jun'13 ON up to 1W above 1W up to 1M above 1M up to 3M above 3M 35 Unsecured Deposit Market, June 213 (BGN mln) 3 25 2 15 1 5.6 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 overnight 13.6 14.6 17.6 18.6 19.6 2.6 other Overnight Market Rates, June 213 21.6 24.6 25.6 26.6 27.6 28.6.5.4.3.2.1. 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 Effective overnight rate - unsecured deposit deals SOFIBID ON SOFIBOR ON 7 28.6
The monthly average interest rate of the overnight unsecured deposit lending in June remained at.2%. The monthly average of the LEONIA, a reference rate based on the unsecured overnight deposit lending by a panel of banks, increased to.2% in June, after.1% in May. Hence the size of the BNB base interest rate for July 213 was set at.2%..22 LEONIA / EONIA, June 213.2 LEONIA EONIA.18.16.14.12.1.8.6.4.2. 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 The money market yield curve continued creeping downwards in the longest maturities. 3. 2.5 2. 1.5 1..5 The money market yield curve reflects the average value of SOFIBID and SOFIBOR 28.6.213 31.5.213. ON SW 2W 3W 1M 2M 3M 4M 5M 6M 7M 8M 9M 1M 11M 12M 8
Secured market There were no secured deposit lending deals in June and the repo-deals share was 33.1 per cent of the total interbank money market transactions volume (BGN 1591.7 million). In May their share was 37.2 per cent (BGN 1474.8 million). BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS BETWEEN BULGARIAN BANKS, JUNE 213 (in millions of the respective currencies) MARKETS: interbank money market euromoney market deals between Bulgarian banks value in millions of BGN deals in BGN deals in EUR deals in USD deals in other currencies 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 equivalent in millions of millions of EUR BGN equivalent in millions of EUR TYPES OF DEALS: unsecured deposit deals 321.3 1641.4 366.9 717.6 1257. 1864.2 953.2 31.9 16.3 secured deposit deals - - - - - - - - - repo of Bulgarian govt securities* 1591.7 813.8 - - 12.8 19. 9.7 - - outright purchases of short-term BGN Bulgarian govt securities 114.3 58.4 - - - - - - - outright purchases of long-term** BGN Bulgarian govt securities* 234.3 119.8 - - - - - - - outright purchases of long-term** forex Bulgarian govt securities* - - 57.7 112.9 - - - - - * at market value; for repos - only the security purchase (money lending) leg ** bonds of over 1 year in original maturity Source: BNB, from commercial banks' daily reports 1.2. Outright interbank purchases of securities on the secondary market On the interbank secondary market for government securities, the market value of the outright purchases of all maturities in June reached BGN 234.3 million (decline of 38.4 per cent compared to May). Within these, the trade with the only short term (6-month) bill reached BGN 114.3 million (following BGN 213.1 million in May). 9
35 Outright deals in Bulgarian government securities, June 213 (BGN mln) 3 25 2 15 1 5 BGN-denominated securities up to 12M forex-denominated securities 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 On the euromoney market in June the volume of outright purchases of government securities also increased for a third month and reached BGN 57.7 million, after BGN 57.2 million in May. 2.6 21.6 24.6 25.6 26.6 27.6 28.6 BGN-denominated securities over 12M 1
2. CAPITAL MARKET The following primary auction of government securities was carried out by the Bulgarian National Bank as an agent of the Ministry of Finance in June: Boris Malinchev (+359 2) 9145 174 - on 17 June for a batch of issue BG24113214 (7Y government securities) with maturity date 16 January 22, at the amount of EUR 2 million and interest rate 3.5%; for participation in the auction were admitted orders at the amount of EUR 33 97 ; the Ministry of Finance approved bids at the amount of EUR 2 million. The monthly secondary market stock-exchange turnover of corporate bonds increased more than two times in June, amounting to BGN 51.5 million (a daily average of BGN 2.6 million) after BGN 21.5 million in May. Significant turnover reached the trade in corporate bonds of NURTS Bulgaria AD (BGN 39 million). Out of stock exchange were concluded deals to the amount of BGN 5.4 million. 3 BSE transactions with bonds, June 213 (date T; BGN mln) 25 2 15 1 5 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 Bonds Segment 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 Bonds / OTC 25.6 26.6 27.6 28.6 The prices of EUR-denominated 217 globals went down to the 16% level. The USD-denominated 215 globals prices went under the 111% mark. 11
On the secondary market the price of the compensation instruments moved within the interval from BGN.46 per item at the beginning of the month to BGN.5 at the month s end, but in the middle of the month it shortly increased to BGN.55. The compensation instruments segment increased by 9%, and amounted to BGN 1.2 million (a daily average of BGN.6 million) compared with the BGN 1.1 million in May. 2 15 1 5 3.6 4.6 BSE transactions with compensatories, June 213 (date T; BGN thousand) 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 Compens.instruments Segment compens.instruments / OTC privatis.segment (comp) 12
ASSET MARKETS BG4 and SOFIX 155 145 135 125 115 15 95 85 75 2.1 17.1 1.2 16.2 3.3 18.3 2.4 17.4 2.5 17.5 1.6 16.6 BG4 SOFIX (right scale) 55 5 45 4 35 3 25 NET ASSETS: equity GROSS ASSETS: real estate 88 87 86 85 84 83 82 81 Real Estate Prices (BGN per sq. m.) (National Statistical Institute quarterly data) 8 2.1 17.1 1.2 16.2 3.3 18.3 2.4 17.4 2.5 17.5 1.6 16.6 28 Gold (XAU/BGN) 26 24 22 2 18 commodities 16 14 2.1 17.1 1.2 16.2 3.3 18.3 2.4 17.4 2.5 17.5 1.6 16.6 forex FOREX (USD/BGN) 1.7 1.65 1.6 1.55 1.5 1.45 1.4 1.35 1.3 1.25 1.2 2.1 17.1 1.2 16.2 3.3 18.3 2.4 17.4 2.5 17.5 1.6 16.6 13
EQUITY CAPITAL (NET ASSETS) Boris Malinchev (+359 2) 9145 174 MARKETS Premium Equities Segment DEALING IN SECURITIES REGISTERED ON THE BSE-SOFIA : STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) JUNE 213 MAIN MARKET Bonds Segment Standard Equities Segment Special Purpose Vehicles Segment municipal bonds corporate bonds UCIT's Compensatio Segment n Instruments Segment Structured Products Segment Subscription Rights Segment ALTERNATIVE MARKET Equities Special Segment Purpose Vehicles Segment Trade in equities not registered on the BSE- Sofia of public of nonpublic companies companies BSE trading 9.8 2.3 4.4 51.5 1.2.3. of which: regular deals 9.8 2.3 4.4 51.5 1.2.3. - - privatis. segment deals (cash) - - - - - - - Privatis. Segm. (compensative)* - - - - - - - - Initial Public Offering Segment* - - - - - - - OTC trading (purchases and sales, repo, tender purchases, redemption, registration etc.)** 9.1 8.9 2.3 5.4. 3.2 4.3 - - Source: BSE-Sofia daily reports * Not included in the above totals ** reported through BSE trading platform The Bulgarian Stock Exchange Sofia (BSE-Sofia) monthly turnover in June marked a multifold decrease, amounting to BGN 34.8 million (a daily average of BGN 1.7 million) after reaching a record high of BGN 286.6 million in May (due to some large single transactions). A more significant turnover was observed in the trade in shares of Kaolin AD, Monbat AD, Himsnab Bulgaria AD and Sopharma AD. The turnover in deals concluded off-stock-exchange (but reported through the stock-exchange platform) amounted to BGN 27.8 million. 2 18 16 14 12 1 8 6 4 2 3.6 4.6 5.6 BSE transactions with shares,june 213 (date T; BGN mln) 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 14 2.6 21.6 24.6 25.6 26.6 27.6 28.6 AltM/SPV/OTC AltM/SPV AltM /Equities/OTC AltM/Equities priv atis.(bgn) SPV/OTC SPV Standard/OTC Standard Equities Premium/OTC Premium Equities
In June the main equity price index of the Bulgarian stock exchange market SOFIX (increase by 3%) showed upward movement with some minor fluctuations during the month, differing from the instable and generally downward movement of the index DAX (decrease by 4%) and the index BET (decrease by 2%). DAX, SOFIX and BET, June 213 9 55 8 7 6 5 4 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 DAX BET SOFIX (right scale) 5 45 4 35 3 25 BGTR3, BGREIT and CGIX in June 213 г. 35 3 25 2 15 1 5 6.3 6.1 6.17 6.24 BG REIT CGIX BGTR 3 15
Pension fund price indices, June 213 (1 July 24 BGN 1) 1.5 1.45 1.4 1.35 1.3 1.25 1.2 1.15 1.1 1.5 1. 12 11 1 9 8 7 6 5 4 3 2 1.2.13 1.9.13 1.16.13 3.6 4.6 5.6 6.6 7.6 8.6 9.6 1.6 11.6 12.6 13.6 14.6 15.6 16.6 17.6 18.6 19.6 2.6 VOLIDEX PROFIDEX UNIDEX Prices of the bank shares in Bulgaria, eurozone and emerging markets, January - June 213 1.23.13 1.3.13 2.6.13 2.13.13 2.2.13 2.27.13 3.6.13 3.13.13 3.2.13 3.27.13 4.5.13 4.12.13 4.19.13 4.26.13 5.9.13 5.16.13 5.23.13 5.31.13 6.7.13 6.14.13 6.21.13 6.28.13 21.6 22.6 23.6 24.6 25.6 26.6 27.6 28.6 BG4 and the equities prices of Bulgarian banks, listed on the BSE - Sofia, June 213 16 155 15 145 14 135 13 125 12 115 11 15 1 3.6 6.6 11.6 14.6 19.6 24.6 27.6 525 475 425 375 325 275 225 175 125 11 1 9 8 7 6 5 BANKS BSE BANKS EMU BANKS EM BG4 BANKS BSE (right scale) 16
The index of the equity prices of the banks listed on the BSE- Sofia showed certain fluctuations during the month, but in general followed the trend of the emerging countries banks and the movement of eurozone banks indices. There were no placements of shares or bonds on the IPO segment of the BSE-Sofia in June. 1 BSE - Initial Public Offering Segment, June 213 (date T; BGN thousand) 8 6 4 2 3.6 6.6 11.6 14.6 19.6 24.6 27.6 shares rights/shares bonds 3. FOREIGN EXCHANGE MARKET The exchange rate of the euro against the U.S. dollar reached a three-month high in the first half of June. Lubomir Tonev (+359 2) 9145 168 Pavlina Babunova (+359 2) 9145 197 Supportive for the single currency was the confidence expressed by the President of the ECB about the economic recovery in the euro area this year, who also noted, that currently there is no reason to introduce negative interest rates. The single currency remained at these high levels with the improved risk-appetite in the markets. This was supported by the Bundesbank monthly report, which showed an expected acceleration in the growth of the German economy in the second half of the year. In mid-june however, the dollar started strengthening with the S&P 17
ratings agency changing the outlook for the U.S. credit rating from negative to stable. The dollar rose further against the other major currencies after the meeting of the FOMC of Fed. It was announced that the central bank would continue with its asset purchase programme, but if the economic indicators improve, the Fed would begin reducing the volume of the programme already this year, and it would abandon it entirely following a decline in unemployment to 7%, expected in the middle of the next year. The exchange rate of the dollar against the lev in June was decreasing during most of the month, reaching the lowest value of 1.45892 lev on June 19. In the last days of the month the trend reversed and the dollar increased. The highest value in June was recorded in the first working day 3.6, when the rate was 1.5356 lev. The average exchange rate of the dollar against the lev for June was 1.4838 lev, more than.26 lev lower than the average rate for the previous month. 1.6 Daily BNB reference exchange rate for the USD, June 213 (BGN per USD 1) 1.58 1.56 1.54 1.52 1.5 1.48 1.46 1.44 1.42 1.4 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 18 21.6 24.6 25.6 26.6 27.6 28.6
USD mln 5 45 4 35 3 25 2 15 1 5 Daily USD turnover and exchange rates of banks, June 213 SPOT traded between banks sold to customers average rate for sales to customers 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 The total turnover of the forex market (gross sum of all purchases and sales of all reporting entities) in June slightly increased, compared with the previous month and reached EUR 41716.3 million, EUR 676.6 million more than the turnover in May. The average daily turnover was EUR 285.8 million, lower than the average turnover in May. The increase in turnover was in both main segments of the foreign exchange market- the spot trade between BNB and the banks and spot trade between the banks and their customers. The trade among banks (excluding the BNB) remained at the levels of the previous month. The currency exchanged between BNB and the banks in June amounted to EUR 18581.5 million. Compared with the previous month the turnover increased by EUR 219.2 million. BNB was a net buyer of currency with a minimum positive balance of EUR 34.7 million. The Central Bank was also a net buyer in the non-cash transactions with budget organisations and a net seller of foreign exchange in the cash transactions. 1.6 1.58 1.56 1.54 1.52 1.5 1.48 1.46 1.44 1.42 1.4 1.38 1.36 1.34 1.32 1.3 bought from customers average rate for purchases from customers average interbank rate BGN per USD 1 19
Foreign exchange trading between banks, June211 to June 212 (in mln of EUR) June-12 May-12 April-12 March-12 February-12 January-12 December-11 November-11 October-11 September-11 August-11 July-11 June-11 78.8 177. 11.7 152. 113.7 167.3 175.9 179. 134. 17.5 179. 233.8 234.2 Monthly EUR trading between BNB and banks, June 212 to June 213(EUR mln)spot June-13 May-13 April-13 March-13 February-13 January-13 December-12 November-12 October-12 September-12 August-12 July-12 June-12 35-9273 938-436 -9399 8963 377-1786 11163-149 -173 1317-288 -11325 1137-12759 -453 1236-1155 -132 1923-14215 -58 14157-14713 18 14731-11119 166 11285-13914 84 13998 158-1368 13838-12847 47 12894 bought from banks sold to banks net. 2
1.99984 EUR exchange rate, June 213 (BGN per EUR 1) 1.95583 1.91182 18 16 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 interbank banks from customers banks to customers Daily EUR turnover of banks, June 213 (EUR mln) SPOT 14 12 1 8 6 4 2 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 traded between banks bought from customers sold to customers The interbank spot trading, without the participation of the BNB, in June remained at the level of the previous month and reached EUR 135.5 million. The turnover between the banks and their final customers in June increased to EUR 4 13.2 million. As in the previous 21
month the banks sold more foreign currency to their customers than they bought from them. The negative balance between purchases and sales of foreign currency in June was 226.6 million. 25 2 15 1 5-5 -1-15 -2-25 2 15 Foreign exchange trading of banks with customers - total, June 213 (in mln of EUR) SPOT 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 28.6 bought from customers sold to customers net Foreign exchange trading of banks with nonresidents, June 213 (in mln of EUR) SPOT 1 5-5 -1-15 -2 3.6 4.6 5.6 6.6 7.6 1.6 11.6 12.6 13.6 14.6 17.6 18.6 19.6 2.6 21.6 24.6 25.6 26.6 27.6 bought from nonresidents sold to nonresidents net 22 28.6
The financial institutions registered in the Central Bank under Art. 3, Para 2 of the Law on Credit Institutions and reporting daily to the BNB foreign currency trading against levs in the country retained their activity levels in June compared to May. They bought foreign currency at the amount of EUR 85.1 million and sold foreign currency equal to EUR 85.4 million. Foreign exchange market June 213 SPOT (in mln of EUR) Purchases Sales Balance Interbank market (commercial banks) 133.5 133.5. (Commercial) banks with customers 1893.3 2119.9-226.6 - of which: with nonresidents 233.4 147. 86.4 BNB total 9541.4 9313. 228.4 BNB with banks 938.1 9273.4 34.7 of which: *with banks - SPOT 632. 391.4 294.6 *with banks - TOM 517.5. 517.5 *with banks - TODAY 2758.6 6182. -3423.4 *with banks - NOTES... BNB transactions with budgetary organisations 233.3 38.1 195.1 BNB notes operations at counters. 1.5-1.5 Source: BNB, from banks and BNB s daily reports Currency structure of forex trading for some participants, June 213 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1 2 3 1-interbank (without BNB); 2-banks with customers; 3-forex trading of financial institutions Others USD EUR 23
Forex swaps and forwards in EUR terms (estimate) FX swap and forward transactions - banks with final customers (in mln of EUR) Purchases Sales Balance June 213 4776.6 4824.6-48. - of which: with nonresidents 472. 4763. -43. FX structure (percentage) EUR 98.4 98.3 Others 1.6 1.7 Interbank FX swap and forward transactions banks (in mln of EUR) Purchases Sales Balance June 213 129.2 129.2. FX structure (percentage) EUR 77.4 77.4 USD 22.6 22.6 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 TENDENCIES Short-term expectations: the interbank money market to maintain the record low interest rate levels; the SOFIX to move within the interval of 43 45 points; USD/BGN to move within 1.5 1.55 leva in July. 24