Monday, February 2, 2015

Economy: The Chinese believe in the stability of the Russian economy – Sight

Economy: The Chinese believe in the stability of the Russian economy – Sight

The largest rating agency Dagong Asian preserved Russia’s credit rating to investment grade, in contrast to the pro-US S & amp; P. Chinese direct claim on the political and biased estimates of the American agency: they are confident in the stability of the Russian economy and the attractiveness of Russian securities.

In contrast to the pro-American rating agency S & amp; P, which recently lowered the sovereign credit rating of Russia to the level of “BBB-”, the largest Asian rating agency Dagong has kept Russia’s credit rating at ‘A ».

«The Russian economy was influenced by the deteriorating external environment, but the level of foreign exchange reserves of Russia provides the necessary buffer for the economy»

S & amp; P decided that the prospects for the Russian economy is bad, so Russia supposedly no longer a country’s investment attractiveness. While Dagong, on the contrary, believes that Russia remains stable place to invest because its economy cope with external pressure.

Experts S & amp; P in its analysis of the Russian economy focus on the negative externalities. They proceed from the fact that Russia’s economic prospects have deteriorated badly in the light of the sharp collapse in oil prices and the impact of Western sanctions. Plus depreciation of the ruble, combined with rising interest rates Russian Central Bank also has a negative Russian economy.

This really can not affect the state of the Russian economy. However, the western agency completely forgets about the apparent internal protective factors – a multibillion-dollar reserves of Russia, the low state debt, anti-crisis plan, finally, the devaluation of the ruble, which is a positive factor for the budget, and so on. D.

S & amp; P as it recognizes these advantages, but does not believe that they will help Russia. However, Chinese experts agency Dagong, analyzed the situation in the Russian economy came to a different conclusion.

«Despite the fact that the Russian economy was under the influence of the deteriorating external environment, the level of foreign exchange reserves Russia provides the necessary buffer for the Russian economy, while maintaining a relatively small gap between the resources to meet its debt obligations and the ability to produce wealth “- according to a press release from the Asian agencies.

In Russia there are huge foreign exchange reserves, which are of the bag, which the West to focus not notice. Yes, last year Russia’s reserves declined by $ 120 billion. However, by the end of 2014 they amounted to 390 billion dollars, which is a significant indicator. Russia is among the top ten countries with the largest volume of reserves. In these reserves Russia could hold out for several years. In Fitch, for example, themselves thought that in 2015 Russia will spend only $ 75 billion of gold reserves, that is the end of the year they will make 315 billion dollars. Accumulated reserves enough easily by as much as five years.

The devaluation of the ruble, of course, reduces the level of incomes of the Russians, increases the cost of imports, but this is a big plus for export, not to mention a good incentive for import substitution. Finally, all that the Russian budget loses on weak oil, it gets through the devaluation of the ruble, according to the chief economist at Alfa Bank, Natalia Orlova.

The government is not going to sit idly by, and intends to comply with all items anti-crisis plan. The first steps to stabilize the banks have already been taken. To plan still have complaints about what the newspaper VIEW, but marked a clear shift from resource-based economy to an innovation.

The unprecedented support for small and medium-sized businesses, especially in the field of innovative production preferences for the development of the aviation industry, a promising technology industry and transport as a whole – are brief plan to combat the crisis. It is important that it has a perception that banks that have received state aid should further down the chain to get that money into the real economy.

According to Dagong, «the current government’s ability to provide political stability in the country “and the strengthening of cooperation of Russia with developing economies will help in easing sanctions pressure. Despite the growing external debt, the solvency of the federal and local governments remains “stable”. Federal government revenues declined, but still shows growth potential in the medium and long term, indicates Dagong.

Considering all these factors, Dagong maintains a “stable” outlook for the sovereign credit rating Russia in local and foreign currency for the next 1-2 года.

Ангажированность

Подобная difference in approach is another significant proof that the American rating agencies make their decisions in Russia, based not on an objective economic analysis, and for the sake of political ambitions of its owner – the US.

About bias decisions Western agencies speaks not only the Russian leadership, but also Western experts, and now about it openly declared and Chinese economists. “Too ideologically, politically standards in determining the rating and credit risks can not be objective and reliable, especially based on them can not make a fair conclusion,” – said the head of Dagong Guan Tszyanzhun, commenting on the Western rating агентств.

Последствия

Предвзятые ratings from Western agencies, in fact, pass unnoticed by Russia and its companies. Under normal conditions, this would mean for them closing the west of the capital market, but because of the sanctions it is already closed for many of them.

As for the markets, the possibility of such a reduction Russia’s rating they have long taken into account, so do not pay attention to it.

There was a danger that the speculative rating level will cause major Russian investment funds to get rid of Russian stocks and bonds simply because they have no right to hold in its portfolio Paper countries with non-investment rating.

However, apparently, investors prefer to sift politically motivated. A striking example – the decision of a sovereign fund of Norway. He will not sell Russian securities due to lower the country’s rating agency S & amp; P. Moreover, the Fund continues to qualify as an asset Russian securities investment grade, the head of the National Welfare Fund of Norway (GPFG) Yngve Slyngstad. And this fund is the largest holder of securities of Russian non-residents, that is, for many small funds can be a guide.

According to the rules, the Norwegian fund should translate into the category of non-investment securities only if the two rating agencies lowered the ratings of Russia to speculative grade. While Russia has “garbage” rating only on S & amp; P, and Fitch and Moody’s maintained a minimum investment grade rating. This is a fairly common rule in investment funds. However, even if someone from Fitch or Moody’s still support the S & amp; P and also lowered the ratings of Russia, it does not mean that the Norwegians will automatically sell Russian bonds.

Norwegian Fund may hold up to 5% of the total bond portfolio in the “junk” bonds. In September, there were only 0.6% of the fund’s portfolio. But Russian securities at September 30, takes about 1% of the portfolio of emerging economies.

Thus, the sale of bonds to the end can not be excluded, but it is unlikely they will turn into sales. And among those investors who have a strategy is not tied to the rating, just there are willing to buy Russian OFZ. Economists point out that from a number of foreign investors already have such “cautious purchases».

As for the ruble, the decline in Russia’s rating to speculative largely already been incorporated in it . Therefore, the ruble is not particularly affected by the decision S & amp; P, now the ruble is more dependent on oil prices.

On the other hand, the preservation of the agency Dagong investment rating Russia is much more important. Because it means that Asian capital markets, which have recently reoriented Russian companies are still open to them.

In this regard, no less important that Dagong Gazprom has assigned the highest credit rating of “AAA”. This will allow the company to profitably place securities in Hong Kong. “With the recent ratings of the” big three “rating agencies (S & amp; P, Fitch and Moody’s) and the situation in the Russian economy, our scores are very important. They allow investors to more objectively evaluate the Russian company – said the head of Guan Jianzhong Dagong. – Assignment of our rating allows the company to issue Hong Kong yuanevye securities ».

« The rating reflects the very high potential of the company, “- said Guan Jianzhong. The sanctions imposed by the US and the EU, as well as short-term deterioration of the situation of the Russian economy will not have a significant impact on the solvency of Gazprom, he added.

The most interesting thing is that agency Fitch conducted stress testing Russian oil and gas companies. What awaits them if the years 2015-2017 will remain the average price of oil at $ 55 per barrel and the dollar against the ruble will be at the level of 60 rubles to the dollar? Their tests revealed that low oil prices should not directly affect the ratings of Russian oil and gas companies. Because even in terms of their fundamentals remain strong: loan burden is acceptable, while revenue has low volatility, experts found out that Fitch.

According to Fitch, there are three factors that may adversely affect the oil and gas industry of the Russian Federation. It is possible tightening of sanctions, the lack of external financing and the reduction of the sovereign rating. The first two are unlikely, because without Russian gas and oil EU will not survive, and with the US trade in this sector is not conducted. External funding covered only by the West, while from Asia there are no obstacles. The real impact can only come from the rating agencies, if in addition to S & amp; P sovereign rating of Russia reduce someone else from western trio.

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