Liquidity continues to recover

Обзор облигаций 05.11.2014 Broader banking sector liquidity once more rose yesterday, up UAH1.90bn to UAH47.95bn, mostly due to the increase in total local currency debt repayments scheduled for the next 30 days, which rose UAH1.09bn to UAH6.11bn. This will cause the broader indicator to decline tomorrow after today's debt repayments. At the same time, banks' correspondent accounts with the NBU rose UAH0.24bn to UAH27.86bn and total CDs outstanding increased UAH0.58bn to UAH13.98bn. KyivPrime interest rates slightly diverged yesterday, as the KyivPrime ON interest rate declined 18bp to 9.70% while KyivPrime 1M interest rate rose 15bp to 16.40%. Investment implications: Liquidity slightly recovered at the beginning of the month following month-end tax payments and just prior to the NBU's debut FX auction announced for today. Banks, in anticipation of the auction, most likely were not active at the FX market. Attracting no demand, the primary bond auction will have no impact on the liquidity indicators which will be published today.