28 September 2011
The Finance Ministry cancelled a scheduled primary local UAH sovereign bonds auction yesterday due to lack of market demand. The Finance Ministry planned to offer three series with maturity in 3M, 9M and 2Y. There were no market bids. Svetlana Rekrut: Yesterday’s auction was the last before today’s scheduled repayment of UAH 4.5 bln in face value in bonds by the Finance Ministry. The lack of market interest in primary bonds stemmed from the low primary yields offered by the Finance Ministry in the last couple of months and the recent UAH deficit. Today’s bonds redemption (UAH 4.5 bln) is the largest until yearend and in our opinion should be a signal to the market that the Finance Ministry intends to maintain its low cost stance through the end of 2011. Thus, we expect low market activity of the primary government local bond market for the rest of this year.