Primary auction results

Обзор облигаций 19.01.2015 Thursday's successful auction provided the MoF with UAH3.12bn of proceeds, the MoF sold and Friday's second additional UAH2.51bn (par value) auction of the same bonds raised another UAH2.42bn of proceeds from three bids submitted at the same 17.00% rate. Investment implications: As the NBU purchased UAH1.74bn of bonds on Thursday, last Friday's demand also was supported by the NBU under domestic QE. The NBU purchased UAH2.76bn of new bonds, some of which were sold by the MoF to banks last Thursday. At the same time, as banking sector liquidity (see comment above) remains very high, part of the demand could be from the market as these bonds are more attractive than the NBU CDs with similar maturity that offer interest rates no higher than 13.50%.