The largest foreign investor in the ruble and the Russian national debt - the Pension Fund of Norway - announced a decision to completely liquidate its investments in the Russian Federation. The richest sovereign fund on the planet, whose assets reached $ 1 trillion in 2017, plans to sell out bonds of developing countries and leave only paper in dollars, euros and British pounds in the portfolio. At the beginning of July on the balance sheet of the Norwegian fund there were bonds of the federal loan for 2.9 billion dollars, according to a review by Raiffeisenbank. According to the new rules, these securities will be sold, and the proceeds will be converted into the currency that the fund will withdraw from Russia.
As a result, the state debt market of the Russian Federation will lose almost 20% of all foreign foreign investment made in the last 1.5 years - in the amount for this time, non-residents have invested in OFZ 14 billion dollars. This record in the history of the inflow "untied" the ruble from oil and by the summer of 2017 raised its rate by 10% above the fundamentally valid values, states the analyst of Promsvyazbank Mikhail Poddubsky.
According to Raiffeisenbank, the Norwegian pension fund accounts for 10% of all non-resident investments in OFZs. A quick sale of such a package could lead to a collapse in the market, so it is in the interest of the fund to gradually exit, dropping paper in small portions, says the head of the department for investment services and underwriting Sviaz-Bank Alexander Nikonov.
The risk, however, is that the outcome of one major investor can induce the rest to follow suit, warns the analyst of Raiffeisenbank Denis Poryvay. The rally in the OFZ market, which threw up their price to the maximum since 2013, is almost exhausted, and the CBR rate has been lowered for years to come, he explains: with inflation of 4% and a central bank rate of 6.5%, 10-year securities will give a yield of 7.2-7.4%, whereas now market value is already 7.5%.
The most serious risk for the market of the Russian national debt and the ruble remains a new package of US sanctions: the bill signed by Donald Trump laid the instruction to the US Treasury to work out a complete ban on investments in government bonds of the Russian Federation, Alexei Golubovich, Managing Director of Arbat Capital, reminds: it is obvious that it is not far off, and whoever does not have time to sell, he himself is to blame ".
Speculative pyramids in the currencies of developing countries are being built slowly, and usually collapse overnight: when the volume of investments "off scale", the slightest risk can cause a chain reaction and the flight of capital, predicts Bank of America strategist Mike Harnett.
"The colossal demand for the currency will be brought almost instantly," in these circumstances, "avoiding a rapid depreciation of the ruble will be virtually impossible," says Natalya Akindinova, director of the Center for Development of the Higher School of Economics.
In the case of a mass exodus of foreigners from OFZ, with oil at 50, the fair rate will rise to 70-73 rubles, Golubovich predicts.
If US sanctions are imposed, OFZ yields can soar by 4 percentage points, and prices - collapse to the peak of the crisis in early 2015, showed an analysis conducted by the Russian Central Bank.
In addition, "a small number of individual banks will see a decline in the capital adequacy ratio H1. 0 below the established minimum level (8%), "warns the Central Bank.
Source: Finanz. en.