Foreign investors arranged a sale of federal loan bonds after the announcement of sanctions

This is an outflow, but not an escape, analysts estimate.
In April, foreign investors arranged a sale of federal loan bonds (OFZ). Their portfolio declined by 131 billion rubles. up to 2.2 trillion rubles, according to the Central Bank. The share of non-residents in the OFZ market declined from a record 34.5% to 32.3%. The OFZ market for the month increased by 0.9% to 6.88 trillion rubles.

In April, panic in the Russian market provoked new sanctions. April 6, the US Treasury announced the inclusion in the list of blocking sanctions SDN (Specially Designated Nationals) 24 Russian businessmen and high-ranking officials and 15 related companies. And on April 9, investors reacted: they began to withdraw from Russian stocks and OFZ, for the day the Russian market lost 2.7 trillion rubles. capitalization. In addition to the sanctions of non-residents, the threat of escalation of the conflict in Syria was scared.

In April-May, non-residents sold OFZ about 200 billion rubles, their share dropped to about 31%, said the first deputy chairman of the Central Bank, Ksenia Yudaeva, at the end of May. The outflow of funds occurred as part of the overall exit of investors from the markets of developing countries, she said. "There is nothing unusual here," Interfax quoted her.

The fall of the OFZ market in April was quite fleeting, said portfolio manager of the management company Raiffeisen Capital Konstantin Artemov: non-residents withdrew from securities within a week, and excessive volume absorbed the domestic market. "Yes, prices have subsided, yields have grown, but the effect of such a sale was very small," he adds.

Reduction of investments by 131 billion rubles. - this is an outflow, but not an escape, says Sergey Suverov, director of the analytical department of the UK BC Billing. While foreigners' interest in Russian securities remains rather low due to the weakening of the ruble, the transition of the Central Bank to a neutral monetary policy, and the plans of the Ministry of Finance to increase borrowings in the market, he adds.

"Probably, now we see the beginning of a more serious sale of public debt in the global exit of investors from emerging markets: prices for OFZ are reduced by 1.5-2%," notes Artemov.

Decrease in the share of non-residents in OFZ may continue in June, agrees senior analyst for macroeconomics and debt markets of Aton Yakov Yakovlev: this week, along with the weakening of the ruble, the yield of such securities also increased significantly. "The general volatility of emerging markets is affected here. Perhaps some investors preferred to fix their profits in OFZs and shift to more profitable instruments in other EM local markets, "he says.

In the second half of the year, Russian federal loan bonds will be in demand, and Suverov is optimistic: on the one hand, Russia has a low level of public debt, on the other hand, such securities have potential in terms of carry trade.