17 March 2017
Daily Update
Kazakhstan in a global context
Analyst Contacts:
pdate
Summary
Yerassyl Berkimbayev
[email protected]
Kazakhstan economic news
» Problem Loan Fund (PLF) plans to buy BTA’s loan from Qazkom
(Page 2)
Dmitriy Sheikin
[email protected]
» Mutual trade of Kazakhstan with EAEU (Page 2-3)
Leila Kulbayeva
[email protected]
Global economic news
» OPEC’s oil cuts may be extended (Page 4)
Tengri Capital, JSC:
+7 (727) 311 05 06
Stock Markets
» KASE grew 2.11 percent on the increased prices of commodities,
especially metals in the last couple of days (Page 5)
Contents:
Kazakhstan economic news
2
Global economic news
4
Equities
5
Credit
6
Bonds
7
Money markets
8
Currencies
9
Commodities
10
Dollar funding
11
Events calendar
12
» Russian MICEX added 1.09 percent, as the oil prices stopped
falling and rebounded back to US$51.7 per barrel (Page 5)
Credit Markets
» Markit iTraxx Asia ex-Japan IG lost 1.95 bp (Page 6)
» Markit iTraxx Europe Crossover reduced 1.31 bp (Page 6)
Government Bond Markets
» South African and Indian bonds’ yield dropped 0.12 bp, as the
South African rand and Indian rupee advanced the most after
the FED increased interest rates (Page 7)
Money Markets
» Chinese interbank effective rate (1y) increased 0.80 bp, as
Chinese Central Bank followed the suit of the FED and raised
the interest rate (Page 8)
Commodities
» Copper prices rose to US$5,901 per ton ,as the production of
refined copper in China rose to 1.37m tons in Feb., the highest
record for the two month (Page 10)
The information provided herein is NOT intended as investment advice. When making investment decisions
investors are recommended to perform their own independent analysis and consider the information and
assessments found in this report as only a single factor in decision-making. PLEASE SEE ANALYST CERTIFICATION,
DISCLOSURES AND DISCLAIMERS AT THE END OF THIS REPORT.
Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Kazakhstan economic news
Problem Loan Fund (PLF) plans to buy BTA’s loan from
Qazkom
The deputy chairman of the National Bank, Oleg Smolyakov, said that the half
of the assets of Qazkom would be transferred to the government’s PLF before
the deal with Halyk Bank. More than 50 percent of Qazkom’s assets is a loan to
BTA Bank that amounts to US$15.7bn. The deputy chairman added that the
assets of BTA Bank would be cleared of all legal and financial risks. The assets
planned to be proposed to the private sector via Public Private Partnership.
The PFL would seek for investors who could manage the assets and use them
in business activity. PLF’s allocations would not be go in the capital of
Qazakom, but would be transferred to clear out BTA Bank’s loan from
Qazkom’s balance.
Figure 1: Qazkom's Assets and Loan Book
Assets (KZTbn)
6,000.00
Loan Portfolio (KZTbn)
5,052
5,000.00
3,972
4,000.00
3,000.00
2,501
2,482
2,869
5,155
3,802
2,290
2,000.00
1,000.00
2013A
2014A
2015A
9M2016
Source: NBRK
_
Mutual trade of Kazakhstan with EAEU
Committee on Statistics of the Republic of Kazakhstan issued the preliminary
data on the trade turnover of Kazakhstan with the EAEU countries. According
to the data, the mutual trade in January 2017 grew 53.6 percent (YoY) and
amounted to US$1198.8m. Exports grew 59.2 percent (YoY) and amounted to
US$367.4m whilst imports grew 51.3 percent (YoY) up to US$831.4m.
Mineral products and metal and metal products amounted to 39.4 percent
and 34.8 percent of the exports structure. The share of chemical products
amounted to 13.6 percent. Finished food products and products of animal and
vegetable origin shared 6.8 percent in the structure.
The largest items of the EAEU’s imports were mineral products 24.7 percent
and machinery/equipment 21.9 percent. The share of metal and metal
products and chemical products was approximately the same -14.5 percent
and 14.2 percent of the total. Products of animal and vegetable origin, ready
food products amounted to 11.8 percent of the imports structure.
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
The news is positive since the expansion of the mutual trade indicates economic
recovery of the trading economies as well as the expansion of internal
consumption of the corresponding countries.
Table 1: Mutual trade with EAEU
US$m
16-Jan
17-Jan
Export
Russia
Belarus
Armenia
Kyrgyzstan
Import
Russia
Belarus
Armenia
Kyrgyzstan
230 .7
213.4
1.3
0
15.97
549 .5
519 .2
16 .3
0 .13
13 .9
367 .4
336.4
3.2
0.03
27.74
831 .4
787.5
26.6
0.31
17
Source: Committee on statistics
_
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Global economic news
OPEC’s oil cuts may be extended
The OPEC may extend oil crude production cuts after the agreement expires
in June, if the world’s oil crude inventories remain excessive, said Saudi
Arabia’s Energy Minister, Khalid Al-Falih. He added that if companies and
investors do not feel confident about the global oil market, the OPEC would
prolong its production cuts agreement. The OPEC countries will meet on May
25 to decide whether to continue its production cuts to meet the main goal of
the OPEC to stabilize the global oil market. On February, Saudi Arabia
increased its output to 10.011m. barrels a day, which is above of the agreed
ceiling. Overall the OPEC’s output in February was 1.39m. barrels a day, which
is lower than its reference level. The main threat to the OPEC’s plan comes
from the US, where production of shale oil is picking up.
Figure 2: WTI and Brent prices
Source: Bloomberg
_
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Equities
 KASE grew 2.11 percent on the increased prices of commodities, especially
metals in the last couple of days
 Russian MICEX added 1.09 percent, as the oil prices stopped falling and
rebounded back to US$51.7 per barrel
Figure 3: KASE Index
Source: Bloomberg
_
Table 2: Equity Indices
NAME
Value
1 Day ∆ (%)
1 month ∆ (%)
YTD ∆ (%)
1 year ∆ (%)
377.73
0.70
2.03
4.51
10.88
2,381.38
-0.16
1.29
6.37
16.70
963.20
2.09
2.57
11.71
17.91
DAX Index
12,083.18
0.61
2.77
5.24
22.15
FTSE 100
7,415.95
0.64
1.59
3.82
19.59
24,288.28
0.10
1.16
10.51
18.58
STOXX 600
Standard & Poor’s 500 Index
MSCI Emerging Markets Index
Hang Seng Index
Shanghai Composite Index
3,268.94
-0.03
2.06
5.29
12.50
19,590.14
-0.33
1.52
2.16
2.16
NASDAQ Index
5,412.08
-0.08
1.64
11.28
11.28
MICEX Index
2,014.37
1.09
-5.35
-9.78
6.54
KASE Index
1,579.03
2.11
-0.33
16.29
56.48
540.42
0.85
0.92
8.22
8.91
Nikkei Index
MSCI Frontier Markets Index
Source: Bloomberg
Table 3: Implied Volatility Indices
NAME
Value
VIX Index
11.21
8.21
VSTOXX Index
VDAX Index
VFTSE Index
1 Day ∆ (%)
1 month ∆ (%)
YTD ∆ (%)
1 year ∆ (%)
-3.61
-2.44
-20.16
-22.37
-2.61
-22.20
-29.03
-44.52
11.52
-26.16
-22.34
-36.44
-49.38
11.70
-19.75
-18.31
-34.45
-47.28
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Credit
 Markit iTraxx Asia ex-Japan IG lost 1.95 bp
 Markit iTraxx Europe Crossover reduced 1.31 bp
Figure 4: Markit iTraxx Asia ex-Japan IG Index
Source: Bloomberg
_
Table 4: CDS Indices
NAME
Markit iTraxx Europe Index
Markit iTraxx Europe Crossover
Value (b.p)
1 Day ∆ (b.p)
1 month ∆
(b.p)
70.84
-0.34
-3.30
YTD ∆ (b.p)
1 Year ∆
(b.p)
-2.51
-2.43
279.25
-1.31
-19.41
-3.90
-33.54
Markit iTraxx Asia ex-Japan IG Index
89.78
-1.95
-13.84
-24.00
-46.32
Markit iTraxx Japan Index
51.77
-0.11
-1.58
-6.42
-28.33
Markit iTraxx Europe Senior Financial
85.90
-0.44
-6.87
-8.54
4.04
Markit CDX Emerging Markets Index
208.68
0.00
-18.39
-13.77
-96.01
Markit CDX North America IG Index
62.42
-0.28
-1.42
-7.91
-21.19
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Bonds
 South African and Indian bonds’ yield dropped 0.12 bp, as the South
African rand and Indian rupee advanced the most after the FED increased
interest rates
Figure 5: Indian Bond Yield to Maturity
Source: Bloomberg
_
Table 5: Developed Market 10Y Bonds
YTM
1 Day YTM ∆
(b.p)
(b.p)
5.69
2.54
0.00
0.27
-5.25
1.18
0.04
-0.54
-1.48
91.27
1.79
0.06
94.06
-0.48
-1.58 145.31
2.33
0.06
96.55
-0.30
-1.32 -42.67
0.37
0.03
100.46
0.01
0.30 -19.19
0.05
0.00
YTM
1 Day YTM ∆
NAME
Price 1 Day ∆ (%)
US-Treasury(USD)
91.34
1 month ∆ (%)
ASW
0.04
-0.85
102.85
-0.32
Spanish Government Bond(USD)
95.70
Italian Government Bond(GBP)
UK-Guilt(GBP)
German Bund(EUR)
Japanese Government Bond(JPY)
Source: Bloomberg
Table 6: Emerging Market 10Y Bonds
NAME
Price 1 Day ∆ (%)
Kazakh Government Bond(USD)
99.40
0.09
Polish Government Bond (PLN)
91.23
Czech Government Bond (EUR)
1 month ∆ (%)
ASW
(b.p)
(b.p)
-1.14 155.90
3.95
-0.01
0.11
0.86 256.32
3.62
-0.01
119.25
0.05
-0.37 127.45
0.14
-0.02
Hungarian Government Bond (HUF)
115.21
-0.01
-0.78
92.69
3.36
0.00
Brazilian Government Bond(USD)
107.67
0.07
-0.40 127.45
4.94
-0.01
Chinese Government Bond (USD)
134.49
-0.05
-0.99 127.45
3.57
0.01
Indian Government Bond (INR)
103.39
0.00
-0.43
55.78
7.06
-0.12
South African Government Bond (ZAR)
112.85
0.74
0.93
59.00
8.53
-0.12
Argentinian Government Bond (USD)
105.37
0.47
0.30 431.48
6.70
-0.07
94.66
0.00
-0.76
2.75
0.00
Thai Government Bond (THB)
4.68
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Money markets
 Chinese interbank effective rate (1y) increased 0.80 bp, as Chinese Central
Bank followed the suit of the FED and raised the interest rate
Figure 6: Chinese and Indian Interbank Effective Rates
Source: Bloomberg
_
Table 7: Monetary Policy Target Rates
Target rate
Current
Previous
Effective
ER 1 Day ∆
tenor
Rate
rate
Rate (ER)
(b.p)
(b.p) 1 Year ∆ (b.p)
o/n
1.00
0.50
0.66
0.00
0.11
0.29
3/15/2017
0.00
-0.01
3/1/2017
United States
YTD ∆
Next
meeting
Canada
o/n
0.50
0.75
0.50
0.04
Eurozone
1w
-0.40
0.05
-0.35
0.00
-0.03
-0.11
3/9/2017
United Kingdom
o/n
0.25
0.50
0.21
0.00
0.05
-0.26
3/16/2017
0.00
0.02
3/16/2017
-0.23
-0.07
3/16/2017
Switzerland
3m
-0.75
-0.25
-0.73
0.00
Norway
o/n
0.50
0.75
0.94
0.02
Sweden
1w
-0.50
-0.35
-0.48
0.00
0.11
-0.02
4/27/2017
Russia
1w
10.00
10.50
10.21
-0.02
-0.16
-0.89
3/24/2017
Japan
o/n
-0.04
n/a
-0.04
0.00
0.02
-0.05
3/16/2017
0.56
1.46
7/23/2017
China
1y
1.50
4.60
3.80
0.80
India
1d
6.25
6.50
6.24
0.03
-0.01
-0.81
4/6/2017
Korea
o/n
1.25
1.50
1.48
0.00
-0.04
-0.15
2/23/2017
Hong Kong
o/n
1.25
0.75
0.94
0.00
-0.09
0.37
2/17/2017
Singapore
o/n
0.08
0.03
1.24
-0.02
-0.10
-0.35
3/28/2017
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Currencies
 Russian ruble appreciated 1.03 percent against US$ as the oil prices
stabilized, so did the Kazakh tenge with a 0.47 percent increase
Figure 7: US$ Exchange Rate YTD(RUB per US$)
Source: Bloomberg
_
Table 8: Exchange Rates against the US$
Per 1 US$
YTD ∆ (%)
1 year ∆ (%)
0.93
-0.05
-1.46
-2.34
5.08
Japanese yen
113.31
0.15
0.57
-2.98
1.88
British pound
0.81
0.10
0.51
-0.04
17.28
Swiss franc
1.00
0.00
-0.61
-2.21
2.99
Euro
Chinese renminbi
1 Day ∆ (%)
1 month ∆ (%)
6.90
0.07
0.53
-0.60
6.57
Kazakh tenge
317.08
-0.47
-0.67
-4.98
-9.16
Russian ruble
57.79
-1.03
0.33
-5.68
-16.43
Australian dollar
1.30
-0.01
-0.17
-6.22
-0.39
Canadian dollar
1.33
0.02
1.73
-0.89
2.67
Mexican peso
19.27
-0.07
-5.77
-7.12
11.16
Brazilian real
3.12
0.47
0.96
-4.03
-16.66
Singapore dollar
1.40
0.16
-1.05
-2.99
3.98
Swedish krona
8.82
-0.05
-1.09
-3.19
7.78
Turkish lira
3.63
0.05
-0.11
2.94
27.65
1,131.88
-0.01
-1.30
-6.29
-3.53
12.77
0.03
-2.05
-7.06
-15.82
4.00
-0.01
-2.07
-4.48
5.86
Korean won
South African rand
Polish zloty
Czech koruna
25.10
-0.05
-1.46
-2.37
5.01
287.60
0.00
-1.00
-2.29
4.88
Indian rupee
65.41
-0.43
-2.48
-3.70
-2.71
Argentinian peso
15.53
-0.26
0.65
-2.22
6.23
Thai baht
35.04
-0.21
-0.07
-2.32
0.54
3.67
0.00
0.00
0.00
0.00
ICE DXY US Dollar Index
100.36
-0.10
-0.68
-1.91
5.80
Trade-weighted Broad US Dollar Index
126.26
-0.32
0.34
-1.53
3.63
Hungarian forint
Emirati Dirham
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Commodities
 Copper prices rose to US$5,901 per ton ,as the production of refined
copper in China rose to 1.37m tons in Feb., the highest record for the two
month
Figure 8: Copper Price Performance (US$/ton )
Source: Bloomberg
_
Table 9: Commodity Prices
NAME
Price (US$)
Oil
Forward
Price (US$)
1 Day ∆ (%)
1 month ∆ (%)
YTD ∆ (%)
1 year ∆ (%)
51.74
51.78
0.08
-7.22
-8.87
24.65
Gold
1,227.10
1,227.10
0.00
-0.85
6.55
-3.00
Copper
5,901.50
5,925.00
0.78
-1.46
6.80
19.27
Gas
2.90
2.91
0.34
2.75
-21.80
50.41
Zinc
2,822.25
2,855.00
0.74
-1.09
10.09
61.83
25.40
n/a
0.59
1.60
24.51
-13.90
Wheat
436.00
435.50
-0.11
-1.25
6.74
-5.84
Cotton
78.17
78.13
-0.05
6.33
10.59
33.88
Uranium
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Dollar funding
 GBP 3m xccy grew 3.75 bp
 CHF 3m xccy added 2.75 bp
Figure 9: 3m Cross-Currency Basis Swaps
Source: Bloomberg
_
Table 10: Cross Currency Basis Swaps
Basis Swap
3m USD Yield Ask
Rate
1 Day ∆ (b.p)
1 month ∆ (b.p)
JPY 3m
-42.00
-0.13
1.88
-0.43
-0.02
EUR 3m
-26.00
2.50
-0.13
-0.59
-0.35
CHF 3m
-30.00
2.75
2.00
-1.03
-0.73
GBP 3m
-10.50
3.75
3.75
0.23
0.34
JPY 5Y
-75.75
0.25
4.81
-0.70
2.15
EUR 5Y
-37.25
0.13
4.50
-0.19
2.15
CHF 5Y
-41.00
-0.75
7.50
-0.84
2.15
GBP 5Y
-10.75
-0.50
1.50
0.67
2.15
Implied
Libor/MS
Source: Bloomberg
March 17, 2017
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Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
Events calendar
Date
Event/Comment
Source/Company
10-Mar-17
Unemployment rate
US
10-Mar-17
NBRK rate decision
Kazakhstan
10-Mar-17
Industrial production YoY
India
13-Mar-17
Tax Collections (BRL bn)
Brazil
13-Mar-17
Current account (USD bn)
Turkey
14-Mar-17
CPI MoM, YoY
Germany
14-Mar-17
CPI MoM, YoY
Sweden
15-Mar-17
Federal Reserve FOMC meeting
US
15-Mar-17
AGRITEK ASTANA, International Exhibition for Agriculture
Astana, Kazakhstan
15-Mar-17
CPI MoM, YoY
US
16-Mar-17
BOJ Policy Statement
Japan
16-Mar-17
BOE rate decision
UK
21-Mar-17
CPI MoM, YoY
UK
21-Mar-17
Nauryz Meiramy
Kazakhstan
22-Mar-17
Nauryz Meiramy
Kazakhstan
23-Mar-17
Nauryz Meiramy
Kazakhstan
24-Mar-17
GDP q/q
France
24-Mar-17
Manufacturing PMI index
Eurozone
24-Mar-17
Manufacturing PMI index
US
24-Mar-17
CBR rate decision
Russia
1-Apr-17
OILTECH ATYRAU, Kazakhstan Petroleum Technology Conference
Atyrau, Kazakhstan
11-Apr-17
AtyrauBuild (ITECA)
Atyrau, Kazakhstan
19-Apr-17
KAZREALTY, Kazakhstan International Real Estate & Investment Exhibition
Almaty, Kazakhstan
26-Apr-17
KZT10bn bond maturity (CCBNKZ 7 ½ 04/26/17 Corp)
Bank Centercredit
26-Apr-17
POWER ASTANA, Kazakhstan International Energy, Electrical equipment and Machine building
Exhibition
Astana, Kazakhstan
_
March 17, 2017
12
Tengri Capital | Kazakhstan markets in a global perspective
Daily Update
ANALYST CERTIFICATION: The research analyst(s) responsible for authoring this report hereby certifies or certify
that (i) the views expressed in this report accurately reflect the personal views of the author(s), while not
necessarily representing the views of their employer and (ii) no part of this report was influenced by commercial
considerations of their employer.
IMPORTANT DISCLAIMER: The information provided in this report is for informational purposes only. No warranty
or representation is made as to the correctness, completeness and accuracy of either the information provided or
the conclusions drawn. Opinions reflected in this document may change without notice. Opinions expressed may
be different or inconsistent with views reflected in other reports produced by Tengri Capital, and Tengri Capital
assumes no obligation to bring such other reports and opinions to the attention of any recipient of this present
report.
© Copyright 2016. Tengri Capital, JSC, Nurly Tau 4B, 17 Al-Farabi, Almaty 050059, Kazakhstan. All rights reserved.
When quoting please cite “Tengri Capital Research”.
March 17, 2017
13