Page 9 - BNE_magazine_02_2020

bne February 2020 The Month That Was I 9
Finance
Eastern Europe
Since the beginning of 2020 foreign investors have brought over $1bn into Russian funds, with two funds accounting for most of the equity inflows. Apart from EPFR-tracked inflow into equity and debt funds, four Russian issuers have already placed $1.6bn worth of Eurobonds in 2020, while the Finance Ministry has placed RUB145bn ($2.3bn) worth of OFZ federal bonds.
Ukraine has placed a €1.25bn Eurobond at 4.375% per annum, according to the Finance Ministry. The newly issued notes will bear interest at the rate of 4.375% per annum. The new issue is expected to be rated B by Standard & Poor's and
B by Fitch. Settlement of the new issue is due to take place on January 27.
Ukraine’s domestic bond market got off to a strong start in 2020 as heavy bidding depressing yields to 10% from 19% a year ago. The Ministry of Finance continues to squeeze bonds by limiting supply to push down yields further,
and introduced new 7-year bonds in January.
Central Europe
The European Investment Bank (EIB) has inaugurated a regional office
in the Lithuanian capital Vilnius to support business and “enhance outreach” in the Baltic states, the EIB said on January 16. The EIB is expected to grow in importance as the EU’s “climate bank” to support the bloc’s more ambitious climate policy, including financing of transition away from coal and other fossil fuels as energy sources.
Prague Stock Exchange strengthened on January 22, its PX index reaching its highest closing value since August 2011, going up by 0.92% to 1,140.48 points, driven mainly by technology company Avast and Erste Bank, the Czech News Agency reported.
The volume of mortgages provided in the Czech Republic decreased by 17% to CZK181.6bn (€7.2bn) in 2019, and their number went down by 22% to 77,400, recording the worst results in five years, according to data provided by Fincentrum Hypoindex statistics. The average interest rate gradually decreased from 3% in January 2019 to 2.34% in December 2019, down by 0.01 percentage point (pp) month on month.
Polish demand for mortgage loans grew 24.1% y/y in December, as measured
by the value of mortgages that customers applied for, the Credit Information
Bureau (BIK) reported. The growth
is underpinned by the strong Polish economy and tightening labour market, which is driving up wages. Persistently low interest rates also play a role.
Southeast Europe
Slovenia successfully issued a 10-year Eurobond on January 7 worth €1.5bn, at a record low annual interest rate of 0.275%. The placement of new bonds will be used to refinance the previous bond issue due on January 27. The previous issue placed a year ago came with a coupon rate of 1.188%. The difference in interest rates will have a positive effect on budgetary savings.
Romania tapped the markets on January 21, taking €3bn in its first bond issues on foreign markets in 2020. At least the same amount will
be raised later in the year. The country issued two tranches, one with a maturity of 12 years and the other one for 30 years at spreads smaller than last year, amid strong demand from investors.
Eurasia
Uzbekistan’s National Bank for Foreign Economic Activity (NBU) has been reorganised into a “joint-stock company” from a “unitary enterprise”. The bank’s non-core assets were set to be partly handed over to the State Assets Management Agency, whereas the other non-core assets were to be sold.
UzAuto Motors (formerly GM Uzbekistan) intends to conduct an initial public offering on local and foreign stock markets within the next two years. Uzbekistan produced over 186,431 passenger vehicles in the first nine months of 2019, up by 40.4% compared to the same period of 2018.
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