Page 83 - IFR Opportunities in Russian capital markets

CHAPTER04
ifrintelligence reports/Opportunities in: Russian Capital Markets
Things became even more uncertain in 2004 when Russia was hit by a mini-banking crisis following the closure of Sodbiznesbank (see text box below). The state took the opportunity to increase its presence in the banking sector after state-owned VTB received a US$800m loan from the CBR and bought out the portfolios of wobbly smaller banks rather than the CBR issuing stabil- isation loans directly to troubled financial institutions.
However, most of the other indicators were not affected by these problems. Maturities have continued to lengthen, although they remain short by developed market standards (Figure 4.4). And the number of sectors represented in the bond market continues to increase (Figure 4.5).
Energy companies were the first round of borrowers, but as their incomes soared on the back of rising oil prices they have all but disappeared from the bond market to be replaced by companies from sectors such as transport, chemicals and telecoms.
At the same time, both the number and size of primary issues and the trading on the secondary market have increased steadily (Figures 4.6 and 4.7).
Figure 4.3: Bond holder distribution, 1999–1H2005 (%)
% 100 90 80 70 60 50 40 30 20 10 0
Source: MDM Bank
Largest banks
Medium and small banks, investment companies Institutional investors
Other entities and individuals
Figure 4.4: Bond maturities, 2002–1H2005 (%)
% 100 90 80 70 60 50 40 30 20 10 0
Source: MDM Bank
<1 year 1–2 years 2–3 years >3 years
76
2002
2000
2003
2004
6 m 2005
6 m 2005
1999
2001
2002
2003
2004