Six ideas for an investor

Debt securities of which issuers to buy for the next six months ideas

Last year was successful for investors in Russian bonds : some of them managed to earn over 16% per annum . Bonds are still more profitable than bank deposits , but which ones to choose? We have selected several ideas that, on the horizon of 3-6 months, will allow you to earn more than the deposit brings.


✔ Deposit rates are falling
✔ Alternative – bonds
✔ Dynamics of the key rate
✔ Which bonds to buy. Ideas
– Sanctioned securities
 Sub – federal bonds – Unrated bonds

Successful courts
– Low demand from institutional investors
– First tier of 2016 issues

Deposit rates are falling

But first, about what will happen to the deposits . Apparently, nothing good. Inflation at the end of 2017 turned out to be below expectations, the key rate will continue to decline, respectively, and rates on deposits in rubles will fall along with it. In the second decade of February 2018, the maximum rate of the 10 largest banks on deposits calculated by the Central Bank was 6.91%.

An alternative to deposits – bonds

The yields will decline (and the prices of securities with a fixed coupon , respectively, will grow) due to the continued decrease in rates in the economy, as well as due to an increase in issuer ratings following an increase in Russia’s rating to investment grade by S&P.

With an increase in the credit rating, the yield decreases (and the price of a security with a fixed coupon goes up), including due to the fact that there is always a greater demand for securities with a high rating – a whole class of large investors are deprived of the opportunity to buy bonds with a low rating , for example, lower investment (BBB-).

The Russian Central Bank will continue to soften monetary policy, moving towards a neutral rate of 6-7% per annum (as it was defined by the head of the Bank of Russia Elvira Nabiullina). According to , this process will go faster than the market expects until the summer, then the regulator will take a break and see what the harvest will be like. If it turns out to be good, then the rate reduction may continue, but not at such a pace. According to the analytical center “Sovekon”, in 2018 the wheat harvest will decrease by only 5% in relation to the record year 2017.

In addition to the price increase and fixed income in the form of a coupon , the bond will bring an additional 4.33 percentage points profitability if you invest in them through an individual investment account and receive a tax deduction . As a result, according to the co-founder of Igor Laukhin, investors, in the worst case, will receive the same profitability as in the deposit, at the best – they will be able to earn on the growth of the price of securities and due to the tax deduction. So which bonds to buy?

What bonds to buy. ideas

You can earn more than on OFZ by carefully choosing securities and counting on their price growth, due to which you can get profitability in excess of what they show considers the following six ideas to be promising on the horizon for the next 3-6 months:

Sanction papers

First of all, these are bonds of Rosneft and Transneft . They trade with large spreads to the risk-free curve, that is, they simply trade with higher returns than should be based on the fundamentals. The supply on the domestic market is greater than it would have been in a situation without sanctions. For example, in mid-February, the demand for Rosneft’s exchange-traded bonds , which it placed on the primary market, significantly exceeded supply: the company planned to borrow 15 billion rubles, investors submitted applications for 50 billion rubles. The company did not restrict demand and placed bonds for 50 billion rubles, paying a premium.

Subfederal bonds

Formally, the regions have credit ratings reflecting the likelihood of default, but in the existing vertical of power they will default only if the state defaults on its obligations, says co-founder Denis Kuchkin.

In a recently published study by ACRA, it is said that the regions’ debt fell for the first time in the period monitored by the agency – by 2% or 37.8 billion rubles. At the same time, its structure changed – the volume of bank loans decreased by 141.6 billion rubles. (-18%), and the volume of placed bonds increased by 91 billion rubles. (+ 20%). “The total debt of the regions on bonds has reached 547 billion rubles. and became a record for the history of observations (since 2005), and on the bond marketmany new regions came out. Regions will reduce debt, spreads will narrow, they will overtake other issues, ”ACRA writes in its review. A reduction in spreads means a decrease in profitability and earnings for the holder of the security due to an increase in its price.

Bonds without rating

Successfully finished trials

Low demand from institutional investors

First echelon of 2016 editions

Due to the difference in taxation, corporate bond issues of 2016 by first-tier issuers are in high demand among institutional investors. We recommend choosing securities with the maximum duration and those that can be bought on the market (not all securities have liquidity, many cannot be bought). We have selected the ones that you can.

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