Liquidity down slightly

Обзор облигаций 20.03.2015 Broader banking sector liquidity fell UAH1.50bn to UAH63.38bn yesterday after setting this month's record high on Wednesday. Banks' correspondent accounts with the NBU rose just UAH0.09bn while total CDs outstanding slid UAH0.13bn to UAH21.84bn. Total local currency debt repayments scheduled for the next 30 days declined UAH1.46bn to UAH10.19bn. KyivPrime interest rates slightly diverged: the KyivPrime ON interest rate was down 68bp to 22.32% while the KyivPrime 1M interest rate rose 10bp to 27.30%. Investment implications: The MoF's debt repayments on Wednesday had no impact on other liquidity indicators due to the following reasons: most local currency repayments were for non-market bonds issued for state banks, Naftogaz's share capital increase, or specifically last year for the NBU. These bonds are mostly in the NBU's portfolio and were not seen by the market. Interest repayments on other local currency bonds were less significant but most likely were partially received by the NBU, the largest bondholder. A small portion of these funds could be spent on the FX market. As the NBU issued UAH0.50bn of 13-day loans to six banks on Wednesday, this inflow could be seen in today's indicators or be used toward the UAH0.40bn in other loan repayments to the NBU scheduled today.