DECEMBER 29 No 14 / 29! The USD/BGN exchange rate reverses the downgrade tendency and increases in December! In December the interbank money market marks consecutive decrease in traded volume as well as in interest rates! The volumes of trade in shares on the Bulgarian Stock Exchange-Sofia show significant growth in December
DEBT MARKETS Benchmark yield curves in the euro area.29 and 3.12.29 8 7 annual yield (%) 6 5 4 3 2.29 3.12.29 1 o/n depo 1w depo 1m depo 3m bill 12m bill instrument 3y 5y 7y 1y Benchmark yield curves in Bulgaria.29 and 3.12.29 annual yield (%) 7 6 5 4 3 2 1.29 3.12.29 o/n depo 1w depo 1m depo 3m bill 12m bill instrument 3y 5y 7y 1y 7 6 Bulgaria and euro area benchmark yield curves 3.12.29 Middle of SOFIBID and SOFIBOR annual yield (%) 5 4 3 2 1 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 3.12.29 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 SOFIBOR and 3M T-bill issuance, January - December 29 (%) 1 9 8 7 6 5 4 3 2 1 1.1 16.1 31.1 15.2 2.3 1. MONEY MARKET 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 13.1 28.1 12.11 27.11 12.12 27.12 3M SOFIBID 3M SOFIBOR 3M T-bill LEONIA BIR In December the interbank money market monthly volume decreases by 11.5 per cent below November to BGN 4921.4 million, resulting from a 21. per cent decline in the deposit lending deals volume to BGN 3659.5 No issuance of 3M government securities in December Vladimir Tsonchev (+359 2) 9145 1712 3
million, and a 36.4 per cent rise in repo deals to BGN 1262. million. In December the total monthly volume of term transactions in Euromoney market dealing increases compared to November. Here the rise is in both, the depo deals volume, by 1.4 per cent to BGN 4433.3 million, as well as in the repo deals volume, by 76. per cent to BGN 278.5 million. The average daily excess reserves in December increase to BGN 69258 thousand after BGN 57639 thousand in November. In 12 calendar days altogether (from 4 th till 6 th, on 14 th and 15 th, and from 23 rd till 29 th, including the holidays) of the month there is relative resource shortage (negative excess reserves). In December the repo deals volume rises, while at the middle of the month the Ministry of Finance makes the choice of primary dealers of government securities for 21, with a criterion the participation on the secondary market of treasuries 1 Interbank money market and excess reserves, December 29 (BGN mln) 8 6 4 2-2 -4 money market excess reserves 3.12 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 December there is a net outflow from banks of BGN 69.3 million as a 4
decrease in resources. Conversely, pension transfers let to an increase of resources by BGN 683. million. 8 Deposit deals, December 29 (BGN mln) 7 6 5 4 3 2 1 3.12 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 December amounts to 74.4 per cent of the interbank transactions, after 83.4 per cent in November. It is banks main tool for managing current daily liquidity. 1.1.1.1. Unsecured market In December term unsecured deposit lending between market participants amounts to BGN 3659.5 million, and 83.6 per cent of this (BGN 357.8 million) are overnight deals, compared to 85.2 per cent share (BGN 3949.5 million) in November. 5
8 Unsecured deposit market, December 29 (BGN mln) 7 6 5 4 3 2 1 overnight other 3.12 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. LEONIA EONIA 6 3.12
The monthly average for the overnight interest rate on unsecured deposit lending is an annual.41%,.14 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),.55% in December. 1.1.1.2. Secured market There is no secured deposit lending in December. The repo deals share is 25.6 per cent of the total transactions volume (BGN 1262. million), after 16.6 per cent in November. 1.1.2. Derivatives market In December the monthly average of the LEONIA, a reference rate based on unsecured overnight deposit lending by 12 banks, decreases to.39%. Hence the size of the BNB base interest rate for January 21 is.39%. Not yet developed in the country. BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS BETWEEN BULGARIAN BANKS, DECEMBER 29 (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 millions of EUR equivalent in millions of BGN equivalent in millions of EUR TYPES OF DEALS: unsecured deposit deals 3659.5 1871.1 1681. 3287.8 849.3 1136.6 581.1 14.4 7.4 secured deposit deals - - - - - - - - - repo of Bulgarian govt securities* 1262. 645.3 133.9 261.9 12.4 16.6 8.5 - - outright purchases of short-term BGN Bulgarian govt securities - - - - - - - - - outright purchases of long-term** BGN Bulgarian govt securities* 123.1 62.9 - - - - - - - outright purchases of long-term** forex Bulgarian govt securities*.. 8.4 16.4 - - - - - * 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 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 December amounts to BGN 123.1 million (after BGN 26.5 million in November), and all the deals were with longer than 12 months securities. 7
On the Euromarket in December the total volume of outright purchases of government securities is BGN 8.4 million, after barely BGN 3. thousand in November. 25 Outright deals in Bulgarian government securities, December 29 (BGN mln) 2 15 1 5 3.12 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 December: - on 7th December for a batch of issue BG237111 (5Y treasury s) with a maturity date 24th of January 212, at the amount of BGN 3 million and 4.% annual interest; Boris Malinchev (+359 2) 9145 174 New placements of the 5Y government s - on 14th December for a batch of issue BG239117 (5Y treasury s) with a 8
maturity date 18th of February 214, at the amount of BGN 3 million and 4.45% annual interest. In December the Bulgarian Stock Exchange Sofia (BSE- Sofia) registered for trading on the unofficial market of s the following corporate issue: - 7Y s for EUR 1 million issued by Finance Consulting EAD - Sofia, interest: 9.%, issue date: 19.8.29, 6-month coupon payment, (stockexchange code 9M7B). The monthly secondary market stock-exchange turnover of corporate s marks more than twofold decrease in December amounting to BGN 13.3 million (a daily average of BGN.7 million) compared to BGN 34. million in December. More significant turnover reached the s of Health and Wellness SIPC (BGN 6.1 million) and Auto Union Group EAD (BGN 2.5 million). On 1st December Standard & Poor s revised the outlook on Bulgaria from negative to stable. The long-term and shortterm sovereign credit ratings were affirmed. Off-stock-exchange deals in s had insignificant amount. BSE transactions with s, December 29 (date T; BGN mln) 1 9 8 7 6 5 4 3 2 1 official official OTC unofficial unofficial OTC 9
The prices of EUR-denominated 213 went under the 11% mark, and of USD-denominated 215 globals fell down the 115% level. On the secondary market the price of the compensation instruments decreases to BGN.19 per item at the end of the month, and in some days reaches even BGN.18 per item. The compensation instruments market turnover marks a slight increase, amounting to BGN 1.3 million, compared with the BGN.5 million in November. Deals concluded off-stock-exchange in December have a small amount. In December the market turnover of rights in shares amountes to BGN.4 million and that in collective investment schemes is insignificant. 5 BSE transactions with compensatories, December 29 (date T; BGN thousand) 4 3 2 1 unofficial unofficial OTC privatis. (comp) 1
ASSET MARKETS 135 125 115 BG4 and SOFIX 55 5 45 15 4 NET ASSETS: Equity 95 85 75 35 3 25 1.1.29 31.1.29 2.3.29 1.4.29 1.5.29 31.5.29 3.6.29 3.7.29 29.8.29 28.9.29 28.1.29 BG4 SOFIX (right scale) GROSS ASSETS: Real Estate (National Statistical Institute quarterly data) 125 12 115 11 15 1 95 9 85 8 Real Estate Prices (BGN per sq. m.) 1.1.9 1.2.9 1.3.9 1.4.9 1.5.9 1.6.9 1.7.9 1.8.9 1.9.9 1.1.9 1.11.9.9 17 Gold (XAU/BGN) 16 15 Commodities 14 13 12 11 1 1.29 2.29 3.29 4.29 5.29 6.29 7.29 8.29 9.29 1.29 11.29 12.29 1.6 Forex (USD/BGN) 1.55 1.5 Forex 1.45 1.4 1.35 1.3 1.25 1.2 1.29 2.29 3.29 4.29 5.29 6.29 7.29 8.29 9.29 1.29 11.29 12.29 11
EQUITY CAPITAL (NET ASSETS) Boris Malinchev (+359 2) 9145 174 BSE-SOFIA IPO MARKET (in millions of BGN) December 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) December 29 MARKETS 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 Trade in equities not registered on the BSE- Sofia of public companies of nonpublic companies INSTRUMENTS AND DEALS: BSE trading Trade in primary instruments, of which: 23.2 54.9 4.5. 13.3 1.3.4. regular deals 23.2 54.9 4.5. 13.3 1.3.4. - - privatis. market deals (cash) - - - - - - - - Privatis. market (compensative)* - - - - - - - - INSTRUMENTS AND DEALS: - OTC trading Trade in primary instruments (block, registration, repo, tender purchases, redemption, etc.)** 14.4 14.6 3.6..1..3 - - 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 December increases substantially amounting to BGN 82.6 million (a daily average of BGN 4.6 million), compared to BGN 26.5 million in November. More significant volumes reaches the trade in shares of Investment Company Galata AD - Varna (BGN 34.1 million), BG Agro AD - Varna (BGN 8.7 million) and CB Central Cooperative Bank AD (BGN 4.2 million). The turnover in deals concluded off-stock-exchange (reported through the stock-exchange platform) amounts to BGN 32.6 million. More significant volumes reaches the trade in shares of Petrol AD (BGN 8.1 million) BG Agro AD (BGN 5.4 million). 12
BSE transactions with shares, December 29 (date T; BGN mln) 5 45 4 35 3 25 2 15 1 5 The prices of the Bulgarian stock market during this month continues showing 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, December 29 6 55 5 45 4 35 3 25 2 15 1 DAX BET SOFIX (right scale) 13 55 5 45 4 35 3 25 2 15 1
BG4, December 29 14 13 12 11 1 9 8 Pension fund price indices, December 29 (1 July 24 BGN 1) 1.25 1.2 1.15 1.1 1.5 1. 5.12 6.12 VOLIDEX PROFIDEX UNIDEX 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 14
There are no placements of shares on the IPO market of the BSE-Sofia in December. BSE primary market, December 29 (date T; BGN thousand) 1 8 6 4 2 shares rights/shares govt sec. s 3. FOREIGN EXCHANGE MARKET During December 29 the USD exchange rate against BGN rises and moves between the values of 1.29354 on 3 December and 1.371 on 23 December. The average USD exchange rate for the month is 1.33822, which is higher by more then.2 BGN in comparison with the previous month s value. Lubomir Tonev (+359 2) 9145 168 Plamen Petrunov (+359 2) 9145 161 1.38 Daily BNB reference exchange rate for the USD, December 29 (BGN per USD 1) 1.37 1.36 1.35 1.34 1.33 1.32 1.31 1.3 1.29 5.12 6.12 12.12 13.12 15 2.12 24.12 25.12 26.12 27.12 3.12
7 6 5 Daily USD turnover and exchange rates of banks, December 29 1.38 1.36 USD mln 4 3 2 1 traded between banks sold to customers average rate for sales to customers Total monthly foreign exchange market turnover, December 28 to December 29 (in mln of EUR) 3.12 1.34 1.32 1.3 1.28 1.26 bought from customers average rate for purchases from customers average interbank rate BGN per USD 1 December-9 November-9 October-9 September-9 August-9 July-9 June-9 May-9 April-9 March-9 February-9 January-9 December-8 33,21.8 37,275.7 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 In December the total turnover of the foreign exchange spot market reaches EUR 3321.8 million at the average daily turnover for the month of EUR 1572.5 million. The pure interbank turnover (without BNB) reaches EUR 73.9 million a substantial increase in comparison with the previous month s value. The USD trade between the banks 16
increases too, equaling USD 13.1 million, which is 12.1 percent of interbank foreign exchange trading. Foreign exchange trading between (commercial) banks, December 28 to December 29 (in mln of EUR) December-9 73.9 November-9 49.7 October-9 44.2 September-9 64.3 August-9 78.3 July-9 75. June-9 67. May-9 52.3 April-9 78.4 March-9 18.5 February-9 89.9 January-9 133.2 December-8 72.5 Monthly EUR trading between BNB and banks, December 28 to December 29 (EUR mln) December-9 November-9 October-9 September-9 August-9 July-9 June-9 May-9 April-9 March-9 February-9 January-9 December-8-7173 -8498-8624 -8338-9686 -1841-11517 -934-129 -1444-152 -9649-1171 164 133 121 35 26-95 2-77 -176-264 -397-336 -433 7337 8631 8745 8373 9712 1746 11537 8957 133 118 115 9313 1639 bought from banks sold to banks net 17
3 Foreign exchange trading between banks, December 29 (in mln of EUR) 25 2 15 1 5 1.99984 5.12 6.12 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 EUR exchange rate, December 29 (BGN per EUR 1) 1.95583 1.91182 BNB (comm.) banks from customers 5.12 6.12 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 interbank (comm.) banks to customers During December the BNB purchases from banks EUR 7336.5 million and sells EUR 7173. million, accounting a positive balance of EUR 163.5 million. The BNB purchases from budgetary organisations foreign exchange equal to EUR 13.2 million and sells foreign exchange for EUR 27.5 million. 18
14 Daily EUR turnover of banks, December 29 (EUR mln) 12 1 8 6 4 2 6 5.12 6.12 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 traded between banks bought from customers sold to customers Daily EUR trading between BNB and banks, December 29 (EUR mln) 4 2-2 -4-6 5.12 6.12 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 spot value - net tommorow value same day value The turnover of the banks with their final customers reaches EUR 3698.2 million, wich is almost EUR 7 million more than November. The amount of foreign 19
exchange that the banks buy (equal to EUR 1984.4 million) exceeds their sales (EUR 1713.7 million) by EUR 27.7 million. Financial institutions trading in foreign exchange on the territory of the state, purchase foreign exchange equal to EUR 82.5 million and sell foreign currencies equal to EUR 79.9 million. 2 Foreign exchange trading of banks with customers, December 29 (in mln of EUR) 15 1 5-5 -1-15 -2 2 15 1 5-5 -1-15 -2 5.12 6.12 12.12 13.12 2 2.12 24.12 25.12 26.12 27.12 3.12 bought from customers sold to customers net Foreign exchange trading of banks with nonresidents, December 29 (in mln of EUR) 5.12 6.12 12.12 13.12 2.12 24.12 25.12 26.12 27.12 3.12 bought from nonresidents sold to nonresidents net
Foreign exchange market December 29 (in mln of EUR) Purchases Sales Balance Interbank market (commercial banks) 73.9 73.9. (Commercial) banks with customers 1984.4 1713.7 27.7 - of which: with nonresidents 244.3 93.1 151.2 BNB total 7466.8 722.8 264. BNB with banks 7336.5 7173. 163.5 of which: *with banks - SPOT 94. 6912. -6818. *with banks - TOM 157.. 157. *with banks - TODAY 785.5 261. 6824.5 *with banks - NOTES... BNB transactions with budgetary organisations 13.2 27.5 12.7 BNB notes operations at counters.1 2.3-2.2 Source: BNB, from banks and BNB s daily reports Currency structure of forex trading: total and for some participants, December 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-banks w ith customers; 4-forex trading of nonbank financial intermidiaries Others USD EUR 21
Forex swaps and forwards in EUR terms (estimate) FX swap and forward transactions - banks with final customers (in mln of EUR) Purchases Sales Balance December 29 18.1 129.6-21.5 - of which: with nonresidents 765.4 996.4-231. FX structure (percentige) EUR 91.2 94.5 Others 8.8 5.5 Interbank FX swap and forward transactions banks (in mln of EUR) Purchases Sales Balance December 29 5. 5.. FX structure (percentige) EUR 1. 1. Others.. 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 1.36-1.34. 22