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As in the Russian financial markets disappear
Material posted: Publication date: 09-11-2014

The current year for financial markets of Russia turned out to be literally fatal. They have long been rather pitiful, but this year things got really bad.

The stock market

Let's start with the stock market. Yes, indeed, serious investors in sufficient volume hasn't been here for several years. Western funds made purchases, but they were point and not long-term.

From the beginning of the year, stocks began to decline, till 3 March, due to political reasons, they fell 10% or more. Last willing to participate in this, apparently, was left there. We should also consider the RTS index, which itself represents nothing, but it is one of the most liquid contracts in the derivatives market. That's just the derivatives market ceased and, in fact, the existence as occurring there in recent times, not at all like the market. First, the RTS index is still near annual lows, and secondly, it is by and large generally anything that isn't focused. Yes, there is a certain correlation with the ruble, but not always. In rouble assets the situation is better, but this is largely due to the fact that in March the Russian companies themselves bought back their shares at cheap prices and give them not going to fall.

Debt market

Following the stock has lost its relevance and the debt market. After the West imposed sanctions, the new bond has practically stopped. The Finance Ministry has planned the following year to issue bonds in large enough amount, limited to a small auctions to internal stakeholders. In General, the debt market in the Russian Federation, of course, but not functioning as desired. It turns out that everything works on the launch of Euroclear, to facilitate access of foreign investors to go to waste.

The foreign exchange market

And finally, Russia said goodbye to the currency market. For many years the Russian currency market was a place of calm, although sometimes it was possible to observe splashes of volatility, but overall, the ruble has been more or less stable. However, after the change of leadership of the Central Bank had taken a new course. Coincidence or something more, but the change of leadership of the Central Bank coincided with the strongest geopolitical conflict. Started overt devaluation of the ruble and the actions of the Central Bank, many experts raised questions. The fact that the statements of Bank of Russia are not entirely consistent with what is happening. The regulator argues that the ruble is weakening under the impact of market factors, but at the same time pursuing a policy that is weakening provokes. In the end, we received the inexplicable fluctuations of the ruble within a day at 4% and even more. The market is completely at the mercy of speculators, and by and large the situation is not particularly different from the derivatives market.

Well, the Russian financial authorities have worked hard to ensure that the markets meet the Western standards that investors would bring their money, but the situation has turned otherwise. Now that the world has undergone such a major change, probably, it was decided that the development of financial markets in the Russian economy is not the important point. In fact, financial market is the brainchild of the West, which, incidentally, often uses it as a geopolitical weapon. For Russia the most important is the real economy, and thus, not portfolio and direct investment.


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