The next location scheduled for September 5, had failed to recognize. As later explained by the Director of the Department of state debt and state financial assets of the Ministry of Finance Konstantin vyshkovsky, due to the volatility in the market investors demanded too high a risk premium, and the office was not ready to place the papers at this price.
“The prices that were listed in the filings, assumed the additional premium yield, and, of course, of this situation, we decided to recognize the auction invalid,” said vyshkovsky.
All posting until today the Ministry of Finance canceled due to “adverse market conditions”, not even after attempts to enter the market.
The plan of the Ministry in terms of attracting net loans on the market for 2018 is 1 trillion rubles. In the first quarter, the Ministry attracted 463 billion, second only 217,6 billion rubles, although the planned 450 billion.
As noted by Konstantin vyshkovsky, the Ministry sees no need to stop the borrowing program on the market in the coming months, but to take any price it is also not ready.
The Finance Ministry is quite able successfully to conduct the auction, but he was just unlucky, an analyst at Raiffeisenbank Denis Poryvai. Two days ago, the market situation was good and the experts predicted the success of the Ministry.
“But today has weakened the ruble, with the growing of oil, which tells about the continuing high outflow of capital. This likely led to the fact that investors sought a bigger prize, with lingering risks. The Finance Ministry has not agreed to it, which ultimately led to the cancellation of the second auction. I think the Ministry of Finance was just unlucky, as it is unlikely that it before each auction there is a clear indication of the customers and their wishes yield”, — said the analyst.
The Ministry of Finance on the request of Forbes on the causes of the renewal of placements did not answer.
The debt market is reeling for several months against the outflow of foreign investor. Their market share of the national debt from April 2018 to September decreased from 34.5% to 26.6%.
Sales began because of the sanctions of the US Treasury against several companies and individuals from Russia, which was introduced on 6 April, and continued due to concerns regarding the expansion of the sanctions regime. As a result, according to the Bank, in August nonresidents sold Russian OFZs about 71 billion roubles. According to experts, the outflow is halted, but may resume amid rising fed rates.
In this situation, the Ministry of Finance would be logical to suspend for a time host, said Denis Poryvai. In his opinion, failed auctions are evidence of a lack of buyers and reduce interest in the market. “Investors willing to buy securities in large volumes, not now. But need the Finance Ministry to borrow not also” — concludes the economist.