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> The domestic money market increased in both activity
and volumes in March; the interest rates remained
unchanged, excluding the average interest rate of the
repo-deals, which slightly increased.
> Volatile trading EUR-USD in March.
> An increase in the SOFIX index in March.
MARCH 2015 No 4 / 2015
2
DEBT MARKET
Middle of Sofibid and Sofibor
3
1. MONEY MARKET
In March the interbank money market volume
was with an increase compared to February,
which is illustrated by the bigger volumes of
deposit and repo-deals. The average daily volume
of the interbank money market substantially
increased.
George Tsvetkov
(+359 2) 9145 1611
4
The trade remained focused mainly in the
overnight maturity; the interest rate throughout
the month changed within a very short range.
Interbank Money Market, volumes (BGN mln)
0
1000
2000
3000
4000
5000
6000
October
2014
November
2014
December
2014
January
2015
February
2015
March 2015
deposit deals repo deals
The overall volume of the domestic money market
increased by 36.33 per cent to BGN 1438.9
million. The deposit lending deals volume went up
by 3.06 per cent to BGN 1041.3 million, while the
repo-deals volume increased almost 9 times (vis-
à-vis the insignificant February turnover), to BGN
397.6 million.
The monthly volume of the euromoney market
term transactions increased by 8.51 per cent and
reached BGN 6278.5 million. The deposit lending
deals (in all currencies: EUR, USD, CHF and GBP)
are with an increase of 8.42 per cent, to BGN
6273.2 million, expressed mainly in an increase in
the U.S. dollar-denominated deals. The repo-deals
registered in March reached BGN 5.3 million.
Increase in volumes of the
deposit and repo-deals…
… in combination with an
increase in the euromoney
market volumes.
5
Interbank Euromoney Market, volumes (BGN equivalent in mln)
0
1000
2000
3000
4000
5000
6000
7000
EUR EUR EUR USD USD USD Other Other Other
January
2015
February
2015
March 2015 January
2015
February
2015
March 2015 January
2015
February
2015
March 2015
deposit deals repo deals
The banking system remains highly liquid. The
average daily excess reserves in March increased
by 5.49 per cent and reached BGN 5365.6 million
following BGN 5086.1 million in February (excess
reserves are calculated taking into account a
calendar month, and not the actual maintenance
period – from the 4th working day of each month
till the 3rd working day of the next). There was not
a single day during the month with “negative”
excess reserves for the system.
Interbank money market and excess reserves,
March 2015 (BGN mln)
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
04.03
05.03
06.03
09.03
10.03
11.03
12.03
13.03
16.03
17.03
18.03
19.03
20.03
21.03
23.03
24.03
25.03
26.03
27.03
30.03
31.03
excess reserves money market
The liquidity in the
banking system
remained significant.
6
Liquidity in the banking system is also influenced
every month by: (1) monetary flows through
government securities - bills and bonds of the
Ministry of Finance, which in March resulted in a
net inflow to banks of BGN 22.9 million; and (2)
pension transfers, which in March led to an
increase in system resources by BGN 800.0
million.
Deposit Deals, March 2015 (BGN mln)
0
20
40
60
80
100
120
140
160
04.0
3
05.0
3
06.0
3
09.0
3
10.0
3
11.0
3
12.0
3
13.0
3
16.0
3
17.0
3
18.0
3
19.0
3
20.0
3
21.0
3
23.0
3
24.0
3
25.0
3
26.0
3
27.0
3
30.0
3
31.0
3
all deposit deals unsecured of which overnight secured
1.1. Interbank market: deposit lending and
repo- transactions
Deposit lending deals have a prevailing share in
the interbank money market volume (deposit
lending and repo-deals); for March this share
decreased and reached 72.4 per cent, after 95.7
per cent in February; the repo-deals comprised
27.6 per cent compared to 4.3 per cent in
February.
Unsecured market
In March term unsecured deposit lending between
market participants amounted to BGN 1041.3
million and 99.4 per cent of these (BGN 1035.5
million) were overnight deals. This share
increased compared to February, when 93.1 per
cent (BGN 940.7 million) of the deals were
overnight.
7
Maturity breakdown of the unsecured interbank trades
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mar'14 May'14 Jul'14 Sep'14 Nov'14 Jan'15 Mar'15
ON up to 1W above 1W up to 1M above 1M up to 3M above 3M
`
Unsecured Deposit Market, March 2015 (BGN mln)
0
20
40
60
80
100
120
140
160
04.0
3
05.0
3
06.0
3
09.0
3
10.0
3
11.0
3
12.0
3
13.0
3
16.0
3
17.0
3
18.0
3
19.0
3
20.0
3
21.0
3
23.0
3
24.0
3
25.0
3
26.0
3
27.0
3
30.0
3
31.0
3
overnight other
8
Overnight Market Rates, March 2015
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
04.0
3
05.0
3
06.0
3
09.0
3
10.0
3
11.0
3
12.0
3
13.0
3
16.0
3
17.0
3
18.0
3
19.0
3
20.0
3
21.0
3
23.0
3
24.0
3
25.0
3
26.0
3
27.0
3
30.0
3
31.0
3
Effective overnight rate - unsecured deposit deals SOFIBID ON SOFIBOR ON
The monthly average interest rate of the
overnight unsecured deposit lending in February
remained unchanged, at the level of 0.01%.
The monthly average of the LEONIA, a reference
rate based on the unsecured overnight deposit
lending by a panel of banks also remained
unchanged and amounted to 0.01%. Hence the
size of the BNB base interest rate for April 2015
was again set at 0.01%.
LEONIA / EONIA, March 2015
-0.08
-0.06
-0.04
-0.02
0.00
0.02
0.04
0.06
04.0
3
05.0
3
06.0
3
09.0
3
10.0
3
11.0
3
12.0
3
13.0
3
16.0
3
17.0
3
18.0
3
19.0
3
20.0
3
21.0
3
23.0
3
24.0
3
25.0
3
26.0
3
27.0
3
30.0
3
31.0
3
LEONIA EONIA
9
The money market yield curve decreased more
visibly throughout maturities longer than 5
months.
The money market
yield curve
reflects the
average value of
SOFIBID
and SOFIBOR
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
1.600
ON
2W 1M 3M 5M 7M 9M 11M
31.03.2015
27.02.2015
Secured market
There were no secured deposit lending deals in
March, while the repo-deals share was 27.6 per
cent of the total interbank money market
transactions volume (BGN 397.6 million); this
share substantially increased compared to
February, when it amounted to 4.3 per cent (BGN
45.1 million).
MARKETS:
value in
millions of
BGN
equivalent in
millions of
EUR
value in
millions of
EUR
equivalent in
millions of
BGN
value in
millions of
USD
equivalent in
millions of
BGN
equivalent in
millions of
EUR
equivalent in
millions of
BGN
equivalent in
millions of
EUR
TYPES OF DEALS:
unsecured deposit deals 1041.3 532.4 156.5 306.1 3293.9 5963.1 3048.9 4.1 2.1
secured deposit deals - - - - - - - - -
repo of Bulgarian govt securities* 397.6 203.3 2.7 5.3 - - - - -
outright purchases of short-term BGN Bulgarian govt securities 48.7 24.9 - - - - - - -
outright purchases of short-term forex Bulgarian govt securities - - 76.9 150.4 - - - - -
outright purchases of long-term** BGN Bulgarian govt securities* 140.4 71.8 - - - - - - -
outright purchases of long-term** forex Bulgarian govt securities* - - 45.3 88.6 - - - - -
* at market value; for repos - only the security purchase (money lending) leg
** bonds of over 1 year in original maturity
Source: BNB, from commercial banks' daily reports
BULGARIAN INTERBANK MONEY MONEY MARKET AND EUROMONEY MARKET DEALS
BETWEEN BULGARIAN BANKS, MARCH 2015 (in millions of the respective currencies)
interbank money market euromoney market deals between Bulgarian banks
deals in BGN deals in EUR deals in USD deals in other currencies
10
1.2. Outright interbank purchases of
securities on the secondary market
On the interbank secondary market for
government securities, the market value of the
outright purchases of all maturities in March
reached BGN 189.1 million (increase of 3.28%
compared to BGN 183.1 million in February).
Outright deals in Bulgarian government securities,
March 2015 (BGN mln)
0
10
20
30
40
50
60
70
04.0
3
05.0
3
06.0
3
09.0
3
10.0
3
11.0
3
12.0
3
13.0
3
16.0
3
17.0
3
18.0
3
19.0
3
20.0
3
21.0
3
23.0
3
24.0
3
25.0
3
26.0
3
27.0
3
30.0
3
31.0
3
BGN-denominated securities up to 12M BGN-denominated securities over 12Mforex-denominated securities
On the euromoney market in March the volume of
outright purchases of government securities
substantially increased by 48.50% and reached
BGN 238.9 million, after BGN 160.9 million in
February.
11
2. CAPITAL MARKET
In March there were no auctions for the
placement government securities, carried out by
the Bulgarian National Bank.
The monthly turnover of corporate bonds listed on
the stock exchange continued its severe decline
during the month, and comprised BGN 0,1 million
(BGN 4,7 thousand daily average), while it was
BGN 2,9 million in February.
On the secondary market the prices of the
compensatory instruments registered slight
changes. The monthly stock-exchange turnover of
compensatory instruments increased and
accumulated to BGN 1,6 million (BGN 0,08 million
daily average) while for February it consisted only
of BGN 0,4 million.
Ivo Grigorov
(+359 2) 9145 1624
12
ASSET MARKETS
GROSS ASSETS:
real estate
(National Statistical
Institute – quarterly
data)
NET ASSETS:
equity
commodities
forex
13
EQUITY CAPITAL (NET ASSETS)
municipal
bonds
corporate
bonds
UCIT Structural
products
of public
companies
of non-
public
companie
sBSE deals 3.8 14.3 3.2 0 0.1 1.5 0 0 0.1 1.9 0.2 0 0
of which:
regular deals 3.8 14.3 3.2 0 0.1 1.5 0 0 0.1 1.9 0.2 - -
priv atis. segment deals (cash) 0 0 - - - - - - 0 0
Priv atis. Segm. (compensativ e)* 0 0 - - - - - - - 0 - 0 0
Initial Public Of f ering Segment* 0 0 - 0 0 - - 0 - 0 - - -
OTC deals (purchases and
sales, repo, tender purchases,
redemption, registration etc.)** 0.7 35.2 3.5 0 0 0 0 0 0 0.1 5.9 - -
Source: BSE-Sof ia daily reports
* Not included in the abov e totals
** reported through BSE trading platf orm
*** The Exchange Traded Products Segment was created in May 2014; it replaced the f ormer UCIT's Segment and Structured Products Segment
Standard
Equities
Segment
Special
Purpose
Vehicles
Segment
Compens
ation
Instrume
nts
Segment
Exchange Traded
Products Segment***
MARKETS
DEALING IN SECURITIES REGISTERED ON THE BSE-SOFIA : STOCK-EXCHANGE AND OTC TURNOVER (in millions of BGN) MARCH 2015
Trade in equities not
registered on the BSE-
Sofia
Equities
Segment
ALTERNATIVE MARKET
Bonds Segment
MAIN MARKET
Premium
Equities
Segment
Subscription
Rights
Segment
Special
Purpose
Vehicles
Segment
The monthly registered turnover of shares on the
stock-exchange market for March continued to
decline, and accumulated to BGN 18.1 million
(daily average of 0,95 million), while in February
it was 25 million. A substantial shares turnover
was registered by Zarneni Hrani Bulgaria AD-
Sofia, Chimimport AD-Sofia, Advance Terrafund
REIT-Sofia and Bulgarian Real Estate Fund REIT-
Sofia.
The value of the off stock-exchange deals
reported using the stock-exchange platform
during March, added up to BGN 35,2 million. Of
which a more substantial amount was registered by
the shares of Chimsnab Bulgaria AD, Bulend
Boris Malinchev (+359 2) 9145 1704
14
Investments REIT, Holding Varna AD and Delta
Credit REIT.
The main equity prices index of the Bulgarian stock
market SOFIX showed in March a stable upward
movement (5.4% increase). For three consecutive
months there was a strong positive movement of the
leading European economy index (Germany) DAX
(growth of 4.9%), whereas the Romanian BET
showed a negative movement (1.0 % increase).
15
16
The index of the equity prices of the banks listed
on the BSE-Sofia showed stable movement during
the month similar in general to the movement of
the Eurozone banks’ and emerging countries
banks’ indices.
There were no issues placed on the Initial Public
Offering segment of the BSE-Sofia in February.
3. FOREIGN EXCHANGE MARKET
The euro fell to a new 12-year low against the
dollar in early March. The main reasons for the
decline of the single currency were ongoing
controversy between Greece and its creditors, as
well as the start of the programme of quantitative
easing by the ECB on 9 March. The rise of the
dollar early in the month was supported by
unexpectedly good data from the labour market,
where job creation in the non-agricultural sector
exceeded forecasts. There was a sharp decline in
the dollar against the euro after the Fed meeting,
from which it became clear that the institution will
not rush to raise interest rates. At the end of the
month the euro retreated against the dollar,
despite the good fundamental news from the
eurozone and Germany as investors went back
their profits in the quarter.
The exchange rate of the US dollar against the
BGN in March continued its upward movement
from the previous months. Changes in the first
ten days were sweeping, with more than 0.01 lev
daily change in the official rate of the dollar
against the lev. maximum value of the dollar in
March of 1.85264 lev was registered on 16.03.
After a few days of stability around the maximum
value, the dollar started to fall, reaching a
minimum value for March,1.78046 lev on 25.03.
The average official exchange rate of the dollar
against the lev for March was 1.81132 lev, nearly
Lubomir Tonev
(+359 2) 9145 1608
Pavlina Babunova (+359 2) 9145 1907
17
0.09 lev higher than the average rate for the
previous month.
18
The total turnover of the forex market (gross sum
of all purchases and sales by reporting entities) in
March was EUR 40 377,1 million. compared to the
previous month, the total turnover increased by
EUR 7 959,2 million. The average daily turnover
for the month was EUR 1 922,7 million and also
increased compared to February.
19
The increase in total turnover is due to the
significant increase compared to the previous
month of trade between the central bank and
banks. Trade between banks and their customers
also grew in March compared to the previous
month, while net interbank (without BNB) trade
turnover decreased compared to February.
The turnover between BNB and the banks in
March reached EUR 17 473,9 million. The
increase compared to the previous month was
EUR 3 533,7 million. Тhe central bank was a net
seller of exchanged currency to the banks with a
negative balance of EUR 542,3 million for the
month. In the transactions with budgetary
organisations in wire transfer BNB was a net
buyer of foreign exchange in March with a balance
of EUR 826.9 million. By the counter transactions
with citizens and budget organisations, the central
bank was a net seller of foreign exchange for the
month with a negative balance of EUR 2.1 million.
20
The interbank spot trading without the
participation of the BNB decreased in March by
comparison with the previous month, and
amounted to EUR 284,0 million.
The trade between banks and their customers in
March increased and reached EUR 3 981,0 million.
The increase compared to February was EUR
488,1 million, and the sales by the banks to their
customers exceeded the purchases from them
with EUR 342,4 million.
21
22
Foreign exchange market March 2015 SPOT (in mln of EUR)
Purchases Sales Balance
Interbank market (commercial banks) 284.0 284.0 0
(Commercial) banks with customers 1819.3 2161.7 -342.4
- of which: with nonresidents 154.2 186.0 -31.8
BNB total 9318.3 9035.9 282.4
BNB with banks 8465.8 9008.1 -542.3
of which: *with banks - SPOT 2267.5 6597.1 -4329.6
*with banks - TOM 18.0 0 18.0
*with banks - TODAY 6180.3 2411.0 3769.3
*with banks - NOTES 0 0 0 BNB transactions with budgetary organisations 852.6 25.7 826.9
BNB notes operations at counters 0.0 2.1 -2.1 Source: BNB, from banks’ and BNB’s daily reports
23
Forex swaps and forwards in EUR terms (estimate)
FX swap and forward transactions - banks with final customers
(in mln of EUR)
Purchases Sales Balance
March 2015 3095.9 3133.0 -37.2
- of which: with nonresidents 3009.5 3009.5 0.0
FX structure (percentage)
EUR 98.2 97.8
USD 1.8 2.2 The figures for foreign exchange swap deals include both the sales of foreign currecies
for BGN and the subsequent purchase operations.
Source: BNB, from banks’ daily reports
TENDENCES
Short-term expectations:
– the interbank money market to keep its activity and
record low interest rate levels, with a slight increase of
traded volumes.
– USD/BGN to move within BGN 1,82 - 1,85.
– a decline of SOFIX due to the uncertainty in the European
market, movement within the range of 490 – 510 points.