OREANDA-NEWS. On 28 April 2009 was announced, that the Finance Ministry (MinFin) sold government bonds for UAH 2.7bn. Namely, 6-month government bonds (annual yield rate 12.5%) were sold for UAH 1.5bn, while 5-year government bond sale (yield rate 15.7%) amounted to UAH 1.2bn. Note that the amount of government bonds sold by the MinFin until 17 April in 2009 was UAH 5.8bn, while it sold UAH 9.8bn of government bonds in 2008.

Millennium Capital considers that the government bonds were indirectly purchased by the NBU similar to the previous purchases. Firstly, this is explained by quite low interest rate offered for the bonds on 17 April, comparing to 20% yield rate offered for the same bonds on 13 April 2009, when the NBU did not participate in the auction. Secondly, Millennium Capital sees that, related to the low investors’ demand on the market and high need of the State Budget in the additional financing, the NBU continues to be the only buyer of the government bonds in 2009. This is also proved by the fact that the government bonds on the NBU’s accounts increased by UAH 5.8bn, excluding the bonds purchased from the commercial banks, which exactly fits the government bonds issue in 2009. Up until now Millennium Capital sees no significant hazards of the inflationary pressure of such money issue by the NBU, since the money issue from the government bonds purchase will be compensated by the significant drop in the money supply (down UAH 51bn) in 1Q2009. Meanwhile we expect that such money emission will temporary slow down after the IMF second tranche is provided.

Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of the major investment banking institutions.