This year foreign investors have invested in Russian OFZ almost 400 billion rubles This is a record amount over the past four years. However, the victory trump will cool their appetite for securities of emerging markets, experts say
For the first nine months of 2016, foreign investors have invested in the Russian Federal loan bonds (OFZ) 376 billion rubles This is a record amount in 2012, when from January to December non-residents invested in government securities almost 550 billion rubles, shows the analytical materials, published by the Central Bank on Friday, November 18. However, after winning trump’s growth will slow, say respondents RBC experts.
According to the Central Bank as of October 1, 2016, the nominal amount of OFZs belonging to non-residents amounted to 1.45 trillion rubles, which is 27% of the total volume of the OFZ market (5,37 trillion). During the month the share of these investors is increased by 1 percentage point (PP), and from the beginning of the year increased by 5.5 percentage points – from 21.5%.
Experts say that after the victory trump foreigners cease so actively to buy Russian Federal loan bonds. “From the beginning we have seen a continuous increase in the volume of purchases of OFZ bonds from non-residents. They invested in a paper on the background of low interest rates and expectations of further reduction” – says the analyst of Raiffeisenbank Denis Poryvai.
According to him, after the US elections, the strategy of behavior of investors in emerging markets have changed. “This is due to the rise in us Treasury yields, a rise in the dollar relative to other currencies, and uncertainty over oil prices,” he explains.
The market expects that the economic policy trump will be more inflationary, agrees the head of Department of debt tools “Aton” Konstantin Glazov. According to him, it will mean more dynamic the fed rate hike. “Consequently carry trade operations (speculation based on the difference in interest rates – RBC) become less attractive than before the victory of trump. So wanting to invest here will be less,” he said.
According to data of the U.S. Treasury, world governments and Central banks in September have sold US treasuries to a record since 1978 the amount of $47.1 billion in Foreign bond holders continued to sell them in October and November. After the victory of Republican Donald trump, the yield on 10-year US Treasuries jumped by 18 November by almost 25% (from 1.86 to 2.32%).
The portfolio Manager UK”Kapital” Dmitry Postolenko notes that in November the outflow of investments from emerging markets. Russian securities also sold off, but to a lesser extent relative to other bond markets in developing countries. “It is impossible to talk about the stampede of OFZ,” said he.
November 9, that is, in the end of the elections and the victory of trump, the yield of OFZ bonds maturing in 2031 that are sensitive to the moods of foreign investors rose from 8.7% to 9%. According to Postolenko, in General, such movement is not critical.
According to him, the share of non-residents on the OFZ market in 27% was rather high, but fit into the average range (24-27%). “However, the share of above 27%, we will see hardly. I think, while further growth is possible,” he added. The growing investments of foreigners in the Russian OFZ market in the near future we do not expect and at Aton.