Page 118 - RusRPTOct20

Sberbank’s decision last summer to extended its $200mn loan to UZ for another three years. Last July, Standard & Poors raised UZ’s long-term credit rating to B-, from CCC. Volodomyr Zhmak, the railroad’s new CEO, said: “The updated forecast regarding Ukrzaliznytsia is an important achievement for Ukraine.”
8.5 ​Fixed income
Investors continue to put money in Russian sovereign bonds despite threat of sanctions. ​Russia's share of JPMorgan's GBI-EM index, the main global benchmark for emerging market local currency bonds, has grown to 8.3%, up from around 7% two years ago and just 1.5% in 2007, new data shows. Analysts say that the country's well over half a trillion dollars' worth of reserves, a competent central bank and conservative fiscal policy make Russia one of the strongest markets, bulletproof to all but the worst-case sanctions. They told Reuters that the new sanctions threats won't dent the appeal of decent 2% 'real' interest rates (rates minus inflation) and one of strongest public balance sheets in the world. Talks about the EU abandoning the Nord Stream 2 gas pipeline, combined with falling oil prices and looming US elections, have knocked 5% to 12% off Russia's ruble, government bond and equity markets over the last few weeks. Nevertheless, JP Morgan data showed that its clients were more invested in Russian bonds coming into the current events than at any time in at least the last six years. High 'real' interest rates, along with Russia's other strong fundamentals, have helped lure back investors, with foreigners owning a record 35% of the ruble-denominated OFZ bond market before the Covid-19 outbreak. Underpinned by its huge reserves of oil and gas, Russia's debt-to-GDP ratio is expected to be just 20% this year - less than a fifth of that of the United States, Britain or France, and under a third of China's.
118 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com