In June, foreign investors have invested in the Russian OFZ about 20 billion rubles, according to the review of liquidity in the banking sector and financial markets, prepared by the Central Bank. In may, they contributed less than RUB 5 billion inflow in government securities. The main demand for government securities traditionally provided by banks: in June they have invested in OFZ slightly less than 80 billion rubles.
The Central Bank believe that foreign investors invested in Russian government securities because of rising risks on the background of the referendum in the UK, where the population voted for the country’s withdrawal from the European Union. “After the announcement of the results of the referendum (June 23) sharply increased volatility in global financial markets, which was accompanied by a decline in oil prices and the sale of international investors from risky assets. This event contributed to the continued flow of funds of non-residents in the least risky segments of the Russian stock market”, — said in the review of the regulator. In the review of the Bank of Russia noted that due to the demand of non-residents and banks the Finance Ministry managed to fulfill the plan of borrowing 85.3%.
Since the beginning of the year, the Ministry of Finance placed OFZ 518 billion RUB 270 billion rubles in the second quarter. In the third quarter the Agency expects to borrow on the domestic debt market of 240 billion rubles. Analyst FK “URALSIB” Dmitry Dudkin does not exclude that the total quota on domestic loans (800 billion rubles in 2016) may be increased to 1 trillion rubles to Finance the budget deficit.
The regulator also notes that last month, non-residents actively sold stocks and corporate bonds. According to the Moscow exchange in June, foreign investors withdrew from the Russian market shares of RUB 42 billion, According to data from the Moscow exchange, basically they sold papers of the oil and gas sector.
The Finance Ministry earlier also reported increased demand for OFZs from non-residents. “We see an increased interest in government securities, including new ones that are in demand. Our tools are in demand among foreign investors, which is invested in Federal loan bonds,” said Finance Minister Anton Siluanov journalists on Thursday, July 7 (quoted by Reuters). In 2017, the Ministry plans to increase domestic borrowing four times.
Siluanov also said that along with domestic investors in the next year can be increased and the proportion of foreigners who will participate in the purchase of OFZ. “The conditions we have a good, interesting paper. Therefore, we see the potential growth of foreign participation in the financial market of Russia”, — said the Minister.
According to the Bank, the share of nonresidents in the OFZ on may 1, 2016 was 22.6%. In December 2014, non-residents owned 24,2% Russian OFZ, but after raising the key rate Bank of Russia and the ruble devaluation the share of foreigners had fallen to 18%.