MinFin raises UAH 2 bln at weekly bond auction

Ukraine’s Finance Ministry raised UAH 2.0 bln at its
weekly bond auction on Nov. 3, compared to UAH 0.4 bln at the auction last week.
The auction receipts came from the placement of 3M and 3Y bonds only.

Practically all auction receipts were generated by a
sole bidder for 3M bonds, which were bought at 7.5% (vs. 7.3% for 3M bonds two
weeks ago). In addition, MinFin satisfied four out of seven bids for 3Y bonds
for just UAH 2.8 mln at 10.95%. MinFin didn’t satisfy any of the nine bids for
1Y bonds with desired interest rates ranging from 10.75% to 11.50%.

Evgeniya Akhtyrko: Despite the
higher receipts, we do not believe that the results of the latest auction
indicate any improvement at the market. Most participants continue to ignore
the offer of government bonds at the primary market. And it looks like the
government has difficulty engaging even state-owned banks to the bond purchase.

We still see no way to revive the stagnant primary
bond market other than hiking interest rates for UAH-denominated bonds. Next
week, MinFin plans to offer 6M, 1Y, 2Y and 4Y UAH-denominated bonds, as well as
1.2Y USD-denominated bonds. The auction receipts are likely to jump as offers
of local Eurobonds usually find demand at the market.