Page 7 - RusRPTApr19

The rock solid fundamentals and improving ratings are proving too tempting for bond traders who snapped up the Ministry of Finance Eurobond offers of $3bn and €750mn in March – the largest issue in six years -- with a total volume of $12bn bid. The US Fed decision to stop tightening has put investors into “risk on” mode and the equity market is also up by 16% YTD with some sectors like banks up 20% as interested in Russian stocks returns.
But the threat of more sanctions still hangs over the market. What the DAKSAA sanctions will look like in their final form is still unknown and the issue wont be resolved until sometime in April. However, the Mueller report’s decisive blow to the Russiagate collusion accusations can only improve sentiment.
Moody’s praised the Russian government for implementing prudent fiscal policies, but at the core of these policies is the accumulation of foreign currency into the National Welfare Fund and insulating Russia’s assets from the reach of sanctions – essentially a war mentality. With the emphasis of safety over prosperity, the state is unwilling to leverage itself in order to deliver growth closer to potential.
7 RUSSIA Country Report April 2019 www.intellinews.com