BONDS: Regions of the Russian Federation in a hurry to the market, `heated&# 39; surplus
Several regions of the Russian Federation have announced plans to enter the bond market before the summer lull, deciding under the conditions of excess liquidity in the market does not wait for a possible reduction of the cost of the Bank of Russia loans in mid-June.
“The market is now warmed up, – said on the phone the deputy chief of earnings management and the government debt of the Volgograd Region Marina Kopaneva. – The market did not immediately react to the decision of the Central Bank to change the key rate. A couple of weeks is nothing to give. “
Russian bond rates falling on the background of monetary easing policy of the Central Bank of the Russian Federation and the surplus liquidity in the banking sector. The yield on bonds of the Moscow region fell by more than 100 basis points, reaching a low of 8.50 percent since the location in November.
Earlier this week, Yaroslavl region held a placement of 10-year bonds for 7.5 billion rubles, and the authorities of the Volgograd region on Friday to hold an auction of bonds by 10 billion rubles. Samara and Belgorod regions in June, also intend to raise funds on the market.
“Regions that are allowed to fiscal rules seek to take advantage of excess liquidity in the bond market and the continuing demand for paper to replace the bonds more expensive to service bank loans to finance projects in the conditions when the Ministry of Finance stingy on funding because of the budget deficit,” – wrote email CEO of Sputnik AM Alexander Losev.
See also: Central Bank: inflation expectations in May fell to 10.3% from 11% in April.
- “The moment is now good, but we believe that the key rate will be reduced, and the yield will be lower, because inflation is already in the region of 4 per cent, so the later one could take and cheaper” – said on the phone the portfolio manager of the Criminal Code “Alfa Capital” Eugene Zhornist
- "It is important that the trend continues and the key rate will come to 6.5-7%"
- coupon benchmark 7-year amortization bonds of Volgograd region at auction June 2 is 9.2-9.5 per cent per annum, the placement volume – 10 billion rubles
- Samara region will offer on June 9 auction of 7-year depreciation of 10 billion rubles bonds
- Benchmark rate of the 1st coupon: 8.4-8.6 per cent per annum
- Possible reduction in the key rate would not allow the Samara Region to raise funds more cheaply because it is already priced in; if the Central Bank keep rates may start correction: Deputy Finance Minister Elena control Zyabkina email
- Belgorod region June 20 will begin placement of 7-year depreciation of bonds is 4 billion rubles
- According to the median forecast of analysts and economists surveyed by Bloomberg, the CBR will reduce the rate on June 16 by 25 basis points to 9 per cent per annum
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