Russia & CIS
With geopolitics becoming increasingly defined by nationalism – both economic and political – sanctions have become a common means of exerting soft power in the international arena. Yet the extent to which the threat of punitive economic measures may impact investors remains unclear.
Since its establishment in 1960, OPEC has seen its proportion of global oil production gradually decline. With the formation of OPEC+ in 2016, which saw OPEC agree to cut production alongside a number of other producers, and Qatar’s recent exit from the bloc, questions have been raised about the cartel’s waning influence – leading some to seriously consider what a world without OPEC would look like.
Eric de Beauchamp, Senior Vice President at Credit Bank of Moscow, admits fear of additional sanctions – more so than existing measures – is weighing on the minds of investors when it comes to Russia. But shrewd management and strong communications allowed CBOM to avoid the fate of numerous large lenders that fell victim of the Central Bank’s cleanup of the sector in 2017, becoming one of the most successful private banks in the country.
RusHydro issued the first Russian corporate Renminbi denominated Eurobond via a dual-currency dual tranche deal against the backdrop of a fairly subdued Russian debt capital market, following up on a three-year RUB20mn 7.4% issuance last February.
The long-forgotten instrument is back in the market as commodity exporters are stuck between sanctions-related forced “de-dollarisation” of the Russian economy and their internal requirements for hard-currency funding.
A closer look at the major strengths, weaknesses, opportunities and threats influencing the investment and debt capital markets climate in Russia.
23 Oct 2018
The recent perturbations across EM assets, the looming shadow of current and potential new sanctions and subdued growth at home have taken a toll on the Russian financial sector. But prudent fiscal and monetary policies and timely actions to minimize sanctions impact have helped shelter banks operating in Russia and the CIS from serious damage, DCM bankers and corporate chiefs have told Bonds & Loans off record and on the ground in Moscow.
The Russian Central Bank tentatively confirmed that the banking sector is experiencing a dollar liquidity deficit. In an apparent push to de-dollarize the economy, it may for now resist from intervening, hoping to encourage more local currency borrowing. But inaction could pile additional pressure on the rouble in coming months.
It has been a tough start to the year for emerging market bonds, but things are looking up as we head into 2H 2018 – you just need to know where to look.
The Russian telecoms giant became a trailblazer in issuing distributed ledger fixed-income instruments this spring with the private placement of a RUB750mn commercial bond using blockchain-embedded smart contracts. Alexander Smirnov, Head of Corporate Finance and Treasury, Mobile TeleSystems PJSC, explains how the company worked with Russia’s National Settlement Depositary and Sberbank to achieve this milestone.
- Sanctions Unsanctioned: Russia Becomes EM’s Riskiest Safe Haven
- CASE STUDY: Belarus Eurobond Prices Inside Better Credits, Opens CIS to Global Markets
- A Disturbance in the Force: Institutional Frameworks and Vigilantism
- Top Dealmaker: RenCap’s Dmitry Gladkov on Russian Corporate Issues and Ratings Boost
- CASE STUDY: Tajikistan Opens Floodgates and Makes Strong Debut with USD500mn Eurobond