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Business / Finance

They will come: Moody's rating will increase the popularity of Russian securities

Banki.ru: monitoring of the banking press 11.02.2019 at 06:30

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International funds will react to the decision by Moody's to raise Russia's rating to increase investment in Russian securities. So consider interviewed by "Izvestia" experts. Moody's last of the three largest rating companies in the world recognized state of the domestic economy stable. The sovereign credit rating of Russia for the first time in recent years has been upgraded to investment grade with a stable Outlook.

Resistant to shocks

in 2015, when oil prices dropped for a long time, but against Russia was declared the first international sanctions, the country's sovereign rating at Moody's remained in speculative grade Ba1. Most global investors have no opportunity to invest in the securities of country c in this figure. Finally, on Friday, February 8, he was promoted to investment grade Baa3.

the rationale Moody's described the incident, improving the stability of the Russian economy to external shocks, that is, new sanctions and falling oil prices, said the Agency. This was achieved largely thanks to the budget rule (the income received from the sale of oil for over $40 a barrel, are reserved in special Fund) and the strengthening of the role of non-energy goods in Russian exports.

Another important factor was the low level of public debt and high security commitments, including cash currency. So, the Agency estimated the international reserves of the Central Bank cover 80% of the external debt, including liabilities for direct investment in the Russian economy. Total lending to Russia is purposefully supported by the authorities at 15% of GDP, which allows highly evaluate the creditworthiness of the country.

Even the introduction of the next package of anti-Russian measures will not cause material damage to the Russian economy, according to the international Agency. The probability of such development of the situation high, I guess its analysts. Most likely, new sanctions expressed in a banning to the US and us companies on the purchase and possession of Russian sovereign bonds and securities issued by state-owned companies, including banks.

Only Moody's is not enough

Moody's was the only Agency from all three major international "evaluators" (similar to the status accorded to Fitch and S&P), preserve the ratings of Russia to speculative level. S&P has returned to the Russian economy to investment grade in February 2018. Then the Agency attributed this to the conservative macroeconomic policies of the government of the Russian Federation and a flexible exchange rate.

Fitch ratings Russia to speculative and not reduced.

the Minister of Finance Anton Siluanov said that the decision of the Agency fair, but "somewhat belated". In his opinion, the assessment was influenced by the high quality of the macroeconomic, fiscal, monetary-credit policy of the Russian authorities.

the Minister of economic development Maxim Oreshkin said that Moody's "long held, but apparently everything, even the most fantastic arguments have dried up".

will be the papers

For most international funds, the rating level is a mandatory criterion when making investment decisions, says the expert of the International financial centre Roman Blinov. Their corporate policy is that a high enough credit rating of certain securities to at least one of three rating agencies can automatically block the investment.

the Decision by Moody's paves the way for investments in the Russian commitments for the largest investment funds, I agree with him, Professor Ranhigs Sergei hestanov. However, despite this, the attitude of the sovereign securities of our country, in his opinion, will be quite restrained — as long as there is still a possibility of sanctions on Russian debt.

Until a new round of measures to save us shutdown in the US, I agree with him the novel of pancakes. However, the probability of tightening of the regime in the coming months, in his opinion, quite high, especially given the difficulties with the INF Treaty.

anyway, both experts believe that the growth rate of foreign investment in the securities will be accelerated due to the decision by Moody's. According to Roman Blinov, great interest can also use the Russian currency, which, according to the international analytical agencies, are significantly undervalued.

If debt indicators in the future will deteriorate to such an extent that the economy can no longer without consequences to absorb external shocks, the ratings of Russia can be again lowered, warned Moody's. Also for future assessments of the Agency may impact a hypothetical destabilization of the banking system if the banks will not be able to adequate the conditions to continue funding the government and business.

Further sovereign rating upgrade is possible with an even larger decline in the economy's vulnerability to external shocks, Moody's analysts wrote. Recipe — the extension of the financial safety net and the lack of sharp political steps leading to international tension. To improve the ranking favors and economic policy of Russia, aimed at increasing productivity and reduce the adverse impact of demographic developments, in particular the pension reform.

Dmitry GRINKEVICH