august 2017 monthly update - javnidug.gov.rs update for investors/2017/republic... · august 2017...

11
August 2017 Monthly Update Politics The European Parliament’s (EP) rapporteur for Serbia, David McAllister, met with Serbian President Aleksandar Vucic on August 25 th , local media reported. During the meeting, President Aleksandar Vucic and McAllister discussed Serbia’s EU path, its all-nation dialogue on Kosovo, and progress in talks with Pristina, according to a statement from President’s office. Prime ministers of the Western Balkans 6 Serbia, Albania, Macedonia, Montenegro, Bosnia-Herzegovina, and Kosovo agreed at an informal summit in the Albanian port city of Durres on August 23 rd to name coordinators from the ranks of their aides within two to three weeks to work together with the chambers of commerce in the region to implement regional cooperation action plans, local media reported, quoting Serbian Prime Minister Ana Brnabic. Serbian Prime Minister Ana Brnabic met with US Vice President Mike Pence on the sidelines of the Adriatic Charter Summit on August 3 rd in Podgorica, Montenegro, local media reported. During the meeting, Brnabic said that Serbian President Aleksandar Vucic’s recen t visit to Washington, D.C. gave an impetus to a further development of the two countries’ relations, noting that an improvement of overall relations with the US is one of Serbia’s foreign policy priorities, according to a statement on the Serbian government’s website. European Integration Minister Jadranka Joksimovic has said that she expects Serbia will open three more chapters of EU accession talks by the end of the year chapter 6, which deals with company law, chapter 33, which deals with financial and budgetary provisions, and chapter 30, which deals with external relations and concerns commercial commitments, local media reported. Fiscal Sector In July 2017, public debt of the Republic of Serbia changed from RSD 2,887.7bn (EUR 23.9bn) at the end of June 2017, to RSD 2,867.8bn (EUR 23.8bn) at the end of July 2017. Central Government public debt to GDP (ESA 2010 methodology) ratio was at the level of 65.2% at the end of July 2017. The major share of public debt is still in foreign currency out of which in EUR is 41.2%, USD 31.5%, RSD 22.0%, SDR 3.5%, CHF 0.5% and other 1.3% (GBP, JPY, DKK, SEC, NOK). In the first seven months of 2017, Public Debt Administration of the Republic of Serbia managed to meet its obligations which amounted to RSD 385.8n (EUR 3.2bn), out of which principal payments amounted to RSD 305.3bn (EUR 2.5bn), while interest and other costs were RSD 80.5bn (EUR 669mln). Vast majority of items repaid in the first seven months of 2017 belong to government securities issued on domestic market RSD 273.5bn (EUR 2.3bn) out of which principal payments were RSD 224.5bn 1 (EUR 1.9bn) and interest payments were RSD 49.0bn 2 (EUR 407mln). Obligations in respect of foreign creditors were repaid in amount of RSD 83.5bn (EUR 694mln), out of which principal RSD 54.0bn (EUR 449mln). Payments in respect of guarantees issued by the Government were RSD 20.5bn (EUR 170mln) out of which principal RSD 18.9bn (EUR 157mln), while interest were RSD 1.6bn (EUR 13mln). In the first seven months of 2017, PDA received RSD 243.4bn (EUR 2.0bn) from domestic market out of which government securities issued in domestic currency amounted to RSD 137.6bn (EUR 1.1bn) while receiving from EUR denominated government securities was RSD 105.8bn (EUR 879mln). Serbia’s state budget recorded a surplus of around RSD 33.2bn (EUR 274.7mln) in the first six months of 2017, the Ministry of Finance has said in a statement, citing preliminary data. In the first six months, Serbia’s state budget recorded revenues of RSD 549bn (EUR 4.5bn), while outlays were RSD 515.8bn (EUR 4.3bn), according to the preliminary data. Economy The Executive Board of the International Monetary Fund (IMF) successfully completed the seventh review of Serbia’s economic p erformance under the Stand-By Arrangement (SBA), as communicated by IMF. IMF Executive Board ascertained that Serbia's business environment has strengthened but further progress on implementing the structural reform agenda is needed, especially in areas of modernizing education, strengthening tax administration, and restructuring of state-owned enterprises and utilities, the Ministry of Finance reported on its website. Serbia ranked first in the world in terms of jobs created relative to population size in 2016, according to the US-based IBM Global Business Services’ latest annual Global Location Trends report, local media reported. Investment bank JP Morgan has included “a dinar-denominated security” in the list of securities it plans to trade in, recommending it to investors, National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said to the local media. JP Morgan itself bought a dinar security for the first time on August 11 th 2017. Тhe National Bank of Serbia’s (NBS) net foreign exchange reserves have never been higher, NBS Governor Jor govanka Tabakovic said at a session of the parliament’s finance committee, as the local media reported. The NBS’ net forex reserves stood at EUR 8.4 billion in 2016, up from EUR 5.9 billion in 2008. Gross forex reserves are even higher, as they include EUR 1.8 billion in banks’ reserve requirements. She also noted that year-on-year inflation remains low and stable four years on. Serbia’s GDP expanded 1.3% year-on-year in real terms in the second quarter of 2017, according to a flash estimate by the Statistics Office. According to an earlier news release from the Statistics Office, Serbia’s GDP expanded 1.2% year-on-year in real terms in Q1. Foreign Direct Investments Serbia ranks first in a global performance index for greenfield foreign direct investment (FDI) for 2016, prepared by FDI Intelligence, a division of the Financial Times (FT), the FT has reported. The index measures the appeal of countries as destinations for greenfield FDI relative to the size of their GDP. Serbia scored 12.02 in the index, thanks to regulatory reform, low labor costs, and access to the EU single market. The government is in talks with a large number of companies, including those from China, but also Russia and Canada, in an effort to find a partner for state copper mining and smelting company Rudarsko-Topionicarski Basen (RTB) in Bor, one capable of investing up to EUR 1 billion over the next several years, according to Mining and Energy Minister Aleksandar Antic, local media reported. Teklas Automotive, owned by Turkish automotive components producer Teklas Kaucuk, will held a groundbreaking ceremony for its new production facility in Vladicin Han this month, in attendance of Serbian President Aleksandar Vucic, local media reported. In early April 2016, Teklas Automotive unveiled a plant for the production of fluid circulation systems in the southern Serbian town. The Turkish company plans to create at least 1,200 jobs and reach sales of EUR 100 million. 1 Repayments based on Frozen Foreign Currency Bonds are not included in this amount 2 The difference between nominal value and discounted value is included in this amount

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Page 1: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Monthly Update Politics

The European Parliament’s (EP) rapporteur for Serbia, David McAllister, met with Serbian President Aleksandar Vucic on August 25th, local media reported. During the meeting, President Aleksandar Vucic and McAllister discussed Serbia’s EU path, its all-nation dialogue on Kosovo, and progress

in talks with Pristina, according to a statement from President’s office.

Prime ministers of the Western Balkans 6 – Serbia, Albania, Macedonia, Montenegro, Bosnia-Herzegovina, and Kosovo – agreed at an informal

summit in the Albanian port city of Durres on August 23rd to name coordinators from the ranks of their aides within two to three weeks to work together with the chambers of commerce in the region to implement regional cooperation action plans, local media reported, quoting Serbian Prime

Minister Ana Brnabic.

Serbian Prime Minister Ana Brnabic met with US Vice President Mike Pence on the sidelines of the Adriatic Charter Summit on August 3rd in Podgorica, Montenegro, local media reported. During the meeting, Brnabic said that Serbian President Aleksandar Vucic’s recent visit to Washington,

D.C. gave an impetus to a further development of the two countries’ relations, noting that an improvement of overall relations with the US is one of

Serbia’s foreign policy priorities, according to a statement on the Serbian government’s website.

European Integration Minister Jadranka Joksimovic has said that she expects Serbia will open three more chapters of EU accession talks by the end of

the year – chapter 6, which deals with company law, chapter 33, which deals with financial and budgetary provisions, and chapter 30, which deals with external relations and concerns commercial commitments, local media reported.

Fiscal Sector

In July 2017, public debt of the Republic of Serbia changed from RSD 2,887.7bn (EUR 23.9bn) at the end of June 2017, to RSD 2,867.8bn (EUR 23.8bn) at the end of July 2017. Central Government public debt to GDP (ESA 2010 methodology) ratio was at the level of 65.2% at the end of July

2017. The major share of public debt is still in foreign currency out of which in EUR is 41.2%, USD 31.5%, RSD 22.0%, SDR 3.5%, CHF 0.5% and

other 1.3% (GBP, JPY, DKK, SEC, NOK). In the first seven months of 2017, Public Debt Administration of the Republic of Serbia managed to meet its obligations which amounted to RSD 385.8n (EUR 3.2bn), out of which principal payments amounted to RSD 305.3bn (EUR 2.5bn), while interest

and other costs were RSD 80.5bn (EUR 669mln). Vast majority of items repaid in the first seven months of 2017 belong to government securities

issued on domestic market RSD 273.5bn (EUR 2.3bn) out of which principal payments were RSD 224.5bn1 (EUR 1.9bn) and interest payments were RSD 49.0bn2 (EUR 407mln). Obligations in respect of foreign creditors were repaid in amount of RSD 83.5bn (EUR 694mln), out of which principal

RSD 54.0bn (EUR 449mln). Payments in respect of guarantees issued by the Government were RSD 20.5bn (EUR 170mln) out of which principal

RSD 18.9bn (EUR 157mln), while interest were RSD 1.6bn (EUR 13mln). In the first seven months of 2017, PDA received RSD 243.4bn (EUR 2.0bn) from domestic market out of which government securities issued in domestic currency amounted to RSD 137.6bn (EUR 1.1bn) while receiving from

EUR denominated government securities was RSD 105.8bn (EUR 879mln).

Serbia’s state budget recorded a surplus of around RSD 33.2bn (EUR 274.7mln) in the first six months of 2017, the Ministry of Finance has said in a statement, citing preliminary data. In the first six months, Serbia’s state budget recorded revenues of RSD 549bn (EUR 4.5bn), while outlays were

RSD 515.8bn (EUR 4.3bn), according to the preliminary data.

Economy

The Executive Board of the International Monetary Fund (IMF) successfully completed the seventh review of Serbia’s economic performance under the Stand-By Arrangement (SBA), as communicated by IMF. IMF Executive Board ascertained that Serbia's business environment has strengthened

but further progress on implementing the structural reform agenda is needed, especially in areas of modernizing education, strengthening tax administration, and restructuring of state-owned enterprises and utilities, the Ministry of Finance reported on its website.

Serbia ranked first in the world in terms of jobs created relative to population size in 2016, according to the US-based IBM Global Business Services’ latest annual Global Location Trends report, local media reported.

Investment bank JP Morgan has included “a dinar-denominated security” in the list of securities it plans to trade in, recommending it to investors,

National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic said to the local media. JP Morgan itself bought a dinar security for the first time on August 11th 2017.

Тhe National Bank of Serbia’s (NBS) net foreign exchange reserves have never been higher, NBS Governor Jorgovanka Tabakovic said at a session of the parliament’s finance committee, as the local media reported. The NBS’ net forex reserves stood at EUR 8.4 billion in 2016, up from EUR 5.9

billion in 2008. Gross forex reserves are even higher, as they include EUR 1.8 billion in banks’ reserve requirements. She also noted that year-on-year

inflation remains low and stable four years on.

Serbia’s GDP expanded 1.3% year-on-year in real terms in the second quarter of 2017, according to a flash estimate by the Statistics Office. According

to an earlier news release from the Statistics Office, Serbia’s GDP expanded 1.2% year-on-year in real terms in Q1.

Foreign Direct Investments

Serbia ranks first in a global performance index for greenfield foreign direct investment (FDI) for 2016, prepared by FDI Intelligence, a division of the

Financial Times (FT), the FT has reported. The index measures the appeal of countries as destinations for greenfield FDI relative to the size of their

GDP. Serbia scored 12.02 in the index, thanks to regulatory reform, low labor costs, and access to the EU single market.

The government is in talks with a large number of companies, including those from China, but also Russia and Canada, in an effort to find a partner for state copper mining and smelting company Rudarsko-Topionicarski Basen (RTB) in Bor, one capable of investing up to EUR 1 billion over the next

several years, according to Mining and Energy Minister Aleksandar Antic, local media reported.

Teklas Automotive, owned by Turkish automotive components producer Teklas Kaucuk, will held a groundbreaking ceremony for its new production

facility in Vladicin Han this month, in attendance of Serbian President Aleksandar Vucic, local media reported. In early April 2016, Teklas Automotive unveiled a plant for the production of fluid circulation systems in the southern Serbian town. The Turkish company plans to create at least 1,200 jobs

and reach sales of EUR 100 million.

1 Repayments based on Frozen Foreign Currency Bonds are not included in this amount 2 The difference between nominal value and discounted value is included in this amount

Page 2: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Macroeconomic Data

Real GDP growth % Industrial

production

July’17/

July’16 in %

CPI Current acc.

Balance***

Government bonds on international

market YTM as of 31st July 2017 Currency units/USD

Currency

units/EUR

2015 2016 2017* July’17/

June’17

in %

July’17/

July’16

in %

June’17 last12

months

mlnEUR

% of

GDP

Serbia

2017

Serbia

2018

Serbia

2020

Serbia

2021

31 July

2017

31 July

2016

31 July

2017

31 July

2016

0.8 2.8 3.0 4.2 -0.4 3.2 -1,702.6 -4.78 1.502% 2.235% 2.874% 3.088% 102.5828 111.2196 120.4014 123.2647

* Estimated value

According to the data of the Serbian Statistical Office, consumer prices fell by 0.4% in July. A monthly decrease

in prices was mostly on account of reduced prices of vegetables, fruit and petroleum products. On the other hand,

the price increase was dominantly affected by the seasonal growth in prices of travel packages and cigarettes. Y -o-

y inflation continued to move within the target tolerance band and fell to 3.2% in July. The rise in core inflation

(consumer price index excluding food, energy, al cohol and cigaret tes) also slowed down and equaled 1.7% y-o-y

in July. The factors affecting inflation movements and NBS expectations for the coming period will be more

elaborated at the presentation of the Inflation Report scheduled for 16 August 2017.

The overall external trade in the Republic of Serbia for the period January – July 2017 amounted to:

- USD 21,704.0 million - which was an increase of 10.6% compared to the same period 2016;

- EUR 19,890.5 million - which was an increase of 13.1% compared to the same period 2016.

The value of exports amounted to USD 9,491.9 million, which was 10.7% increase when compared to the same

period last year, while the value of imports amounted to USD 12,212.1 million, which was 10.6% increase relative

to the same period last year. Expressed in Euros, the value of exports amounted to EUR 8,698.3 million, which was

the increase of 13.2%, compared to the same period last year. The value of imports amounted to EUR 11,192.2

million, which was 13.1% increase wh en compared to the same period last year.

Source: Belgrade Stock Exchange

2.8%

1.6%

-2.1%

13.0%

78.2%

*Real GDP growth for 2016 (%)

YoY inflation rate December (%)

*Ɨ Budget deficit (% GDP)

Unemployment rate Q4 2016

**Foreign Debt as of December

2016 (% GDP)

2016

3.0%

3.2%

-1.7%

14.6%

73.8%

*Real GDP growth for 2017 (%)

YoY inflation rate July (%)

*Ɨ Budget deficit (% GDP)

Unemployment rate Q1 2017

**Foreign Debt as of March 2017

(% GDP)

2017

2.03.04.05.06.07.08.09.0

10.0

% Belgrade OverNight Index Average

250.0

450.0

650.0

850.0

1,050.0

1,250.0

1,450.0

1,650.0

1,850.0Belgrade Stock Exchange Indices

Belex 15 index Belex line index

Source: Statistical Office of the Republic of Serbia; National Bank of Serbia; Bloomberg; Ministry of Finance and Economy * Estimated value; **According to

NBS methodology Foreign Debt consist of Public and Private sector debt; *** According to methodological concept of IMF and EU “BPM6” applicable from April

2014; Ɨ General Government;

Page 3: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Currency, Interest Rates and FDI

Key Policy Rates of National Bank of Serbia Current value Last change Date of last meeting Next board meeting

Key policy rate - 2w repo 4.00%

0.00% 10.08.2017 07.09.2017 Deposit facility interest rate 2.50%

Lending facility interest rate 5.50%

Source: National bank of Serbia

Source: National bank of Serbia

• NBS FX reserves stood at EUR 9,948.0 mln at end-July, covering 203% of money supply (M1) or six months’

worth of the country’s imports of goods and services (twice the level prescribed by the standard on adequate level

of coverage of imports of goods and services by FX reserves). In July, gross FX reserves ro se by EUR 277.7 mln

compared to end-June. Net FX reserves (total reserves less banks’ FX balances on account of required reserves and

other requirements) came at EUR 8,279.0 mln at end-July, up by EUR 302.0 mln from end-June. In July NBS FX

reserves increased mostly as a result of NBS FX purchase interventions in the IFEM (inflow of EUR 220.0 m ln),

exceeding significantly outflows arising from the change in cross -currency movements in the international

financial market, decreased FX required reserves alloca tions of banks, servicing of citizens’ frozen foreign

currency savings and outflows on other grounds (total ing EUR 150.3 mn). The increase in FX reserves was

recorded also on account of net inflows with respect to government lending activity and net sale o f FX securities

in the amount of EUR 98.5 mln, as well as inflows on the grounds of donations, interest, and other inflows (EUR

109.5 mn). Trading volumes in the IFEM amounted to EUR 669.3 m ln in July, up by EUR 155.9 mln from the

month before. In the firs t seven months of 2017, interbank trading volumes reached EUR 3,119.9 m ln.

In July, the dinar appreciated against the euro by 0.4% in nominal terms, and the NBS intervened in the IFEM by

purchasing EUR 165 mln in order to ease excessive short -term volatility of the exchange rate.

• The industrial production in the Republic of Serbia in July 2017, when compared to July 2016, increased by

4.2% and in relation to 2016 average, it increased by 2.0%. The industrial production in the period January – July

2017, compared with the same period 2016, increased by 2.5%.

23456789

101112

%National Bank of Serbia Interest Rates

Key policy rate - 2w repo

Deposit facility interest rate

95

100

105

110

115

120

125

130

In RSD Exchange Rates

EUR/RSD USD/RSD

Page 4: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017 In EUR million

Source: National bank of Serbia; *FDI value has been presented in compliance with the Sixth Edition of the Balance of Payments and International

Investment Position Manual, International Monetary Fund, 2009 (BPM6) from the end of 2013.

Public Debt Report

Public Debt Stock and Structure as of 31st July 2017: EUR USD RSD GDP%

Direct Liabilities (A)

Internal Debt 8,982,086,945 10,542,272,614 1,081,455,843,158 24.6%

External Debt 12,939,561,204 15,187,158,903 1,557,941,284,352 35.4%

Direct Liabilities in Total 21,921,648,150 25,729,431,518 2,639,397,127,510 60.0%

Indirect Liabilities (B)

Internal Debt 285,063,738 334,579,220 34,322,073,168 0.8%

External Debt 1,612,252,056 1,892,299,730 194,117,404,704 4.4%

Indirect Liabilities in Total 1,897,315,794 2,226,878,949 228,439,477,871 5.2%

Non-Guaranteed Local Government Debt (C)

Internal Debt 243,801,580 286,149,838 29,354,051,574 0.7%

External Debt 102,484,610 120,286,154 12,339,290,465 0.3%

Non-Guaranteed Local Government Debt in Total 346,286,190 406,435,992 41,693,342,039 0.9%

Central Government Public Debt (A+B) 23,818,963,944 27,956,310,467 2,867,836,605,381 65.2%

General Government Public Debt (A+B+C) 24,165,250,133 28,362,746,459 2,909,529,947,420 66.2%

In EUR million

Date Internal Debt External Debt Monthly Change

of Public Debt Direct Liabilities Indirect Liabilities Direct Liabilities Indirect Liabilities

31/08/2016 -42.2 -16.5 -27.9 -24.1 -110.7

30/09/2016 -8.5 -22.2 -82.0 -20.8 -133.4

31/10/2016 206.2 -32.2 127.9 151.5 453.4

30/11/2016 -146.7 -9.2 277.4 -4.9 116.7

31/12/2016 -85.7 -22.9 251.4 -29.2 113.5

31/01/2017 -124.7 -13.3 -133.5 -46.3 -317.8

28/02/2017 -1.1 -3.4 71.4 -22.1 44.8

31/03/2017 38.1 -12.7 -5.8 -20.8 -1.1

30/04/2017 50.1 -10.8 -437.8 8.0 -390.5

31/05/2017 140.5 -17.0 -202.5 -19.4 -98.3

30/06/2017 100.7 -26.9 -202.1 -35.5 -163.9

31/07/2017 9.2 -12.5 -58.3 -14.3 -76.0

2,486 2,068 1,133 3,320

753

1,298 1,236

1,804 1,861 992

7.4%6.7%

3.8%

9.9%

2.4%

3.8% 3.7%

5.5% 5.4%

2.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008 2009 2010 2011 2012 2013 2014 2015* 2016 June 2017

Foreign Direct Investment in Serbia in period 2008 - June 2017

FDI (net), EUR million FDI (net), %GDP

DYNAMICS OF PUBLIC DEBT

Page 5: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017 In EUR million

Source: Public Debt Administration

INTERNAL DEBT ANALYSIS EXTERNAL DEBT ANALYSIS

Source: Public Debt Administration

Source: Public Debt Administration

22,500

23,000

23,500

24,000

24,500

25,000

25,500

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000In

EU

R m

illi

on

Public Debt Stock and Structure

Internal debt - direct liabilities Internal debt - indirect liabilitiesExternal debt - direct liabilities External debt - indirect liabilitiesCentral Government Public Debt (right axis)

38.9%

36.0%

36.5%

37.0%

37.5%

38.0%

38.5%

39.0%

39.5%

Internal public debt/total public debt ratio

61.1%

59.0%

59.5%

60.0%

60.5%

61.0%

61.5%

62.0%

62.5%

63.0%

63.5%

64.0%

External public debt/total public debt ratio

8,982

285

0

100

200

300

400

500

600

8,200

8,300

8,400

8,500

8,600

8,700

8,800

8,900

9,000

9,100

In E

UR

mil

lio

n

Internal Public Debt Structure

Direct liabilities Indirect liabilities

12,940

1,612 1,6001,6251,6501,6751,7001,7251,7501,7751,8001,8251,8501,8751,900

10,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

14,500

In E

UR

mil

liio

n

External Public Debt Structure

Direct liabilities Indirect liabilities

Page 6: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Source: Public Debt Administration

Government Securities DOMESTIC MARKET OVERVIEW

Source: Public Debt Administration

Source: Public Debt Administration

56.5%

42.4%

1.1%

Internal Public Debt Currency Structure

RSD EUR USD

40.3%

50.9%

0.9%

5.7% 2.2%

External Public Debt Currency Structure

EUR USD CHF SDR Other

2.64%

3.48%4.65%

5.00%

6.50%

5.60%

12.99%

1.5%

3.5%

5.5%

7.5%

9.5%

11.5%

13.5%

6M 53W 2Y 3Y 5Y 7Y 10Y

Last Primary Auction Accepted Rate on

Securities Denominated in Local Currency

2.64%

3.56%

4.97%

6.46%

10.32%

8.94%

12.99%

1.5%

3.5%

5.5%

7.5%

9.5%

11.5%

13.5%

6M 53W 2Y 3Y 5Y 7Y 10Y

Average Accepted Rates at Primary Auction on

Securities Denominated in Local Currency

0.55%

1.04%1.87%

2.60%

4.00%

3.75%

0.1%

0.6%

1.1%

1.6%

2.1%

2.6%

3.1%

3.6%

4.1%

4.6%

53W 2Y 3Y 5Y 10Y 15Y

Last Primary Auction Accepted Rate on

Securities Denominated in EUR

0.74%

1.38%3.12%

3.83%

4.58%

5.29%

0.1%

1.1%

2.1%

3.1%

4.1%

5.1%

6.1%

53W 2Y 3Y 5Y 10Y 15Y

Average Accepted Rates at Primary Auction on

Securities Denominated in EUR

Page 7: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Republic of Serbia Eurobond 2021 - Price/Yield

Date Closing price

YTM Monthly price change %

Monthly yield change %

31.07.17 116,11 3,088 0,3% -4,8%

30.06.17 115,71 3,245 0,4% -5,5%

31.05.17 115,20 3,433 -0,1% -0,8%

30.04.17 115,35 3,461 0,9% -8,0%

31.03.17 114,28 3,760 0,6% -5,0%

28.02.17 113,64 3,958 0,7% -5,1%

31.01.17 112,91 4,169 1,0% -6,3%

31.12.16 111,83 4,450 0,0% -0,8%

30.11.16 111,86 4,486 -2,7% 15,9%

31.10.16 114,96 3,872 -1,5% 8,6%

30.09.16 116,70 3,564 0,5% -4,5%

31.08.16 116,13 3,730 0,2% -2,3%

31.07.16 115,92 3,817 1,0% -6,6%

30.06.16 114,75 4,087 0,6% -4,1%

Source: Bloomberg

2.50

2.90

3.30

3.70

4.104.50

4.90

5.30

5.70

6.10

6.50

6.90

7.30

7.70

96 $

98 $

100 $

102 $

104 $

106 $

108 $

110 $

112 $

114 $

116 $

118 $

120 $

In %

Price/YTM Graph - Serbia Eurobond 2021

Closing price YTM

100 bps

130 bps

160 bps

190 bps

220 bps

250 bps

280 bps

310 bps

340 bps

370 bps

400 bps

430 bps

460 bps

490 bps

0.0

1.0

2.0

3.0

4.0

5.0

6.0

In %

YTM US Dollar Interest Rate Swap - 5Y

EUROBOND OVERVIEW

Spread to benchmark Spread to US Dollar Interest swap rate

Republic of Serbia Eurobond 2021 - Tap

Issuer: Ministry of Finance of the Republic of Serbia

Ratings: BB- (S&P); BB- (Fitch)

Maturity: 28.09.2021

Coupon: 7.25% semi-annual

*Size: USD 2.0bn

**Re-offer yield: 6.625%

Re-offer price: 104.179

Spread to US Treasury Benchmark: 497.0 bps

Announcement date: 27.09.2012

Listing: London Stock Exchange

*Primary auction USD 1,0bn 21.09.2011.; Tap Issuance 27.09.2012. USD 1,0bn. **Tap Issuance re-offer yield.

Page 8: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Republic of Serbia Eurobond 2017

Issuer: Ministry of Finance of the Republic of Serbia

Ratings: BB- (S&P); BB- (Fitch)

Maturity: 21.11.2017

Coupon: 5.250% semi-annual

Size: USD 750.0mln

Re-offer yield: 5.450%

Re-offer price: 99.135

Spread to US Treasury Benchmark: 482.5 bps

Announcement date: 14.11.2012

Listing: London Stock Exchange

Spread to benchmark Spread to US Dollar Interest swap rate

Source: Bloomberg

1.301.601.902.202.502.803.103.403.704.004.304.604.905.205.505.806.10

6.40

95.0 $

96.0 $

97.0 $

98.0 $

99.0 $

100.0 $

101.0 $

102.0 $

103.0 $

104.0 $

105.0 $

106.0 $

107.0 $

In %

Price/YTM Graph - Serbia Eurobond 2017

Closing price YTM

25 bps45 bps65 bps85 bps

105 bps125 bps145 bps165 bps185 bps205 bps225 bps245 bps265 bps285 bps305 bps325 bps345 bps365 bps385 bps405 bps425 bps

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

In %

YTM US Dollar Interest Rate Swap - 1Y

Republic of Serbia Eurobond 2017 - Price/Yield

Date Closing price

YTM Monthly price change %

Monthly yield change %

31.07.17 101,13 1,502 0,0% -30,2%

30.06.17 101,16 2,151 -0,5% 22,3%

31.05.17 101,62 1,759 -0,3% 0,1%

30.04.17 101,91 1,757 -0,1% -9,4%

31.03.17 102,06 1,940 -0,2% -3,1%

28.02.17 102,31 2,002 -0,1% -10,2%

31.01.17 102,39 2,229 -0,1% -5,4%

31.12.16 102,50 2,357 -0,2% -3,9%

30.11.16 102,66 2,453 -0,4% 7,3%

31.10.16 103,06 2,287 -0,4% 8,0%

30.09.16 103,48 2,118 -0,1% -7,2%

31.08.16 103,55 2,282 0,1% -9,1%

31.07.16 103,49 2,510 0,1% -7,4%

30.06.16 103,41 2,710 -0,4% 3,7%

Page 9: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

\

Source: Bloomberg

2.50

3.00

3.50

4.00

4.50

5.00

89.0 $

91.0 $

93.0 $

95.0 $

97.0 $

99.0 $

101.0 $

103.0 $

105.0 $

107.0 $

In %

Price/YTM Graph - Serbia Eurobond 2020

Closing price YTM

20 bps40 bps60 bps80 bps

100 bps120 bps140 bps160 bps180 bps200 bps220 bps240 bps260 bps280 bps300 bps320 bps340 bps360 bps380 bps400 bps420 bps440 bps

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

In %

YTM US Dollar Interest Rate Swap - 4Y

Republic of Serbia Eurobond 2020

Issuer: Ministry of Finance of the Republic of Serbia

Ratings: BB- (S&P); BB- (Fitch)

Maturity: 25.02.2020

Coupon: 4.875% semi-annual

Size: USD 1.5bn

Re-offer yield: 5.150%

Re-offer price: 98.401

Spread to US Treasury Benchmark: 378.4 bps

Announcement date: 14.02.2013

Listing: London Stock Exchange

Republic of Serbia Eurobond 2020 - Price/Yield

Date Closing

price

YTM Monthly price

change %

Monthly yield

change %

31.07.17 104,91 2,874 0,5% -7,8%

30.06.17 104,42 3,118 0,1% -3,5%

31.05.17 104,26 3,231 -0,1% 0,2%

30.04.17 104,40 3,225 0,6% -7,1%

31.03.17 103,83 3,472 0,4% -4,9%

28.02.17 103,43 3,649 0,6% -6,0%

31.01.17 102,84 3,881 1,0% -8,6%

31.12.16 101,83 4,245 -0,1% 0,1%

30.11.16 101,90 4,239 -1,7% 14,8%

31.10.16 103,65 3,692 -1,0% 8,6%

30.09.16 104,68 3,400 0,3% -3,9%

31.08.16 104,34 3,539 0,3% -3,5%

31.07.16 104,00 3,666 0,8% -6,8%

30.06.16 103,16 3,935 0,3% -2,7%

Spread to benchmark Spread to US Dollar Interest swap rate

Page 10: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017

Source: Bloomberg

0.00

1.00

2.00

3.00

4.00

5.00

6.00

96.0 $

98.0 $

100.0 $

102.0 $

104.0 $

106.0 $

108.0 $

110.0 $

In %

Price/YTM Graph - Serbia Eurobond 2018

Closing price YTM

70 bps

90 bps

110 bps

130 bps

150 bps

170 bps

190 bps

210 bps

230 bps

250 bps

270 bps

290 bps

310 bps

330 bps

350 bps

370 bps

390 bps

410 bps

430 bps

450 bps

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

In %

YTM US Dollar Interest Rate Swap - 2Y

Republic of Serbia Eurobond 2018 - Price/Yield

Date Closing

price

YTM Monthly price

change %

Monthly yield

change %

31.07.17 104,76 2,235 0,0% -7,3%

30.06.17 104,78 2,410 -0,3% 1,1%

31.05.17 105,12 2,384 -0,2% -1,6%

30.04.17 105,34 2,422 0,0% -6,3%

31.03.17 105,32 2,586 0,0% -6,5%

28.02.17 105,28 2,766 0,2% -7,4%

31.01.17 105,12 2,988 0,3% -8,6%

31.12.16 104,79 3,270 -0,1% -1,1%

30.11.16 104,94 3,307 -1,0% 15,2%

31.10.16 106,04 2,871 -0,2% -0,8%

30.09.16 106,20 2,894 0,0% -3,7%

31.08.16 106,20 3,006 -0,1% -2,0%

Republic of Serbia Eurobond 2018

Issuer: Ministry of Finance of the Republic of Serbia

Ratings: BB- (S&P); BB- (Fitch); B1(Moody’s)

Maturity: 03.12.2018

Coupon: 5.875 % semi-annual

Size: USD 1.0bn

Re-offer yield: 6.125%

Re-offer price: 98.937

Spread to US Treasury Benchmark: 476.5 bps

Announcement date: 21.11.2013

Listing: London Stock Exchange

Spread to Benchmark Spread to US Dollar Swap Interest rate

Page 11: August 2017 Monthly Update - javnidug.gov.rs update for investors/2017/Republic... · August 2017 Monthly Update ... David McAllister, met with Serbian President Aleksandar Vucic

August 2017 Amortizing bond - London Club 2024

Auction Date Maturity Date Nominal Value Inflow - Market Value Coupon rate

1.10.2004 1.11.2024 1.080.000.000 972.000.190 6,75%

Closing price and YTM

Date Closing price YTM Monthly price change % Monthly yield change %

31.07.17 102,83 6,256 0,5% -1,4%

30.06.17 102,32 6,347 0,0% -0,1%

31.05.17 102,32 6,352 0,3% -1,0%

30.04.17 101,96 6,417 0,7% -1,9%

31.03.17 101,21 6,543 -0,2% 0,5%

28.02.17 101,43 6,508 -0,2% 0,6%

31.01.17 101,68 6,468 0,0% -0,1%

31.12.16 101,64 6,477 0,0% 0,1%

30.11.16 101,69 6,473 0,2% -0,5%

31.10.16 101,50 6,507 0,3% -0,6%

30.09.16 101,24 6,548 -0,4% 0,9%

31.08.16 101,62 6,489 -1,3% 3,2%

31.07.16 102,93 6,287 -0,4% 0,9%

30.06.16 103,31 6,232 -0,1% 0,2%

Spread to benchmark Spread to US Dollar Interest swap rate

Source: Bloomberg

6.00

6.10

6.20

6.30

6.40

6.50

6.60

6.70

6.80

6.90

7.00

7.10

7.20

94.0 $

95.0 $

96.0 $

97.0 $

98.0 $

99.0 $

100.0 $

101.0 $

102.0 $

103.0 $

104.0 $

105.0 $

In %

Price/YTM Graph Amortizing Bond - Serbia London Club 2024

Closing price YTM

375 bps

400 bps

425 bps

450 bps

475 bps

500 bps

525 bps

550 bps

575 bps

600 bps

625 bps

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

In %

YTM US Dollar Interest Rate Swap - 8Y