Page 72 - RusRPTFeb20

investors are actively buying, including a mystery buyer of RUB58bn ($932mn) worth of ruble-denominated sovereign debt in the third week of January. According to the Ministry of Finance, this was one of the largest fulfilled bids in history, with the purchaser buying nearly the entire issuance of OFZs maturing in November 2025 at the weekly auction.
“Onlookers are debating who the mystery buyer is. Consensus says it’s a domestic financial institution—otherwise the ruble-dollar rate would’ve moved, yet it barely reacted,” BMB said in a note.
However, January came to an end the markets went into “risk off” mode on fears of the spread of the Wuhan avian flu that lead to a general sell off and profit taking.
“Russia’s OFZ market also went through a volatile patch due to global market jitters, in particular, because of coronavirus concerns. Compared with last Friday, yields are up by 1bp to 6bp, Rosbank said in a note on January 30.
“We observe further steeping of the yield curve since the beginning of the year. The 10Y-2Y spread is at 68bp and the 10Y-5Y spread is at 37bp now. It seems that many market participants are comfortable to add bonds at the front part of the curve – but while selling the back end. The ‘Russia reflation’ trade based on the recently announced boost in Government spending seems to drive the move,” Rosbank added.
72​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com