Prices for international bonds of Uzbekistan in the global capital markets remain stable
Tashkent, Uzbekistan (UzDaily.com) -- On 13 February 2019, Uzbekistan placed its first international bonds for 5 and 10 year with total value of US$1 billion.
Over the past two months, their prices in the secondary market were stable and varied in accordance with general trends, influenced by global economic processes, macroeconomic changes and expectations.
Price fluctuations on 5-year international bonds to their nominal value range from 99,200% to 100,950% (with a yield from 4,532% to 4,933%), including 100,333% as of 19 April (yield - 4,670%).
Price fluctuations on 10-year international bonds to their nominal value ranged from 98,000% to 100.523% (5.306% - 5.640%, respectively), including 100.160% as of 19 April (yield - 5,335%).
The price of international bonds is inversely proportional to the yield on them. Interest rate yield decreases when the price rises.
The following factors influenced the price change:
- expectations and decisions on the financial policy of the US Federal Reserve and the Central Bank of the European Union;
- placement of sovereign and corporate international bonds by developing countries on world financial markets;
- Brexit, changes in trade relations between China and the United States of America, as well as other global economic trends.
The dynamics of prices for Uzbek Eurobonds over the past two months indicates that they correspond to the general situation in the capital markets. In other words, during the initial offering, they were not significantly underestimated or overestimated compared to the fair market value.
The fact that the price changes within the general fluctuations in the market and maintains relative stability with respect to the nominal value of the bonds means that international investors have no significant risk or negative expectations regarding these bonds. Eurobonds prices serve investors as barometers of the macroeconomic situation and expectations in the republic. Therefore, changes in cost are also associated with systemic reforms and a cautious macroeconomic policy of Uzbekistan, as well as with ensuring the transparency of relevant information.
Low price volatility and demand for Uzbek bonds mean that our country is integrated into the international financial system. This, in turn, requires a systematic analysis of changes in the global economy that affect global capital markets.