The global financial crisis will not have any significant impact on the development of Russia’s mortgage market, asserts Igor Shuvalov, First Deputy Prime Minister of Russia.
“Maybe the market will be developing slower compared with the past two years, but it will nonetheless be moving forward,” he told reporters in Kemerovo today.
Igor Shuvalov is in the West Siberian city of Kemerovo to attend a conference on the implementation of the Affordable Housing national project in the Kuznetsk Coal Basin (Kuzbass) region.
Earlier this week, Russian Prime Minister Vladimir Putin said the government was not going to change Russia’s strategic development plans because of the global financial crisis. “Russia is part of the global economy, and the crisis has a significant impact on Russia’s stock exchanges,” he said, noting that this factor “should be and will be taken into account in Russia’s development plans,” but the government would not cancel or postpone such plans.
The Finance Ministry said it would auction off RUB 200 billion (approx. $7.72bn) and RUB 300 billion (approx. $21.58bn) on October 7 and 8, respectively, placing temporarily idle budget funds on five-week bank deposits at a minimum interest rate of 8.25 percent (on October 7) and 8 percent (on October 8).
Earlier, the Finance Ministry discussed the possibility of using the National Wealth Fund’s assets on the domestic market. In connection with the global financial crisis, the Finance Ministry could correct its investment recommendations by using the National Wealth Fund, said Deputy Finance Minister Dmitry Pankin. He said the proposals had been sent to competent departments, but there have so far been no responses. Still, the Finance Ministry has prepared the necessary documents. “We are ready,” Pankin said.
Depending on the situation, the Finance Ministry will be able to estimate exactly how much of the Fund could be invested on the domestic market, and how much on international markets, according to Pankin. He said the Fund’s assets would not be used to refinance corporate foreign debts.
Russian stocks opened slightly lower on Friday, edging down 1-1.5 percent. On the MICEX, the biggest loser was Transneft, with its preferred stock falling 4.5 percent. The RTS index was less than 1 percent.
Analysts blamed the decline on the flow of bad news from abroad, including falling western and Asian indices and weakening oil prices. Traders are expected to refrain from active operations today, instead taking a wait-and-see stance.
On Tuesday, Russian stocks closed lower, with the RTS shedding 3.06 percent to 1,152.7 points and the MICEX sliding 4.04 percent to 976.12 points. The biggest loser on the MICEX was Polyus Gold, which lost more than 15 percent. Rosneft tumbled 7.7 percent, Norilsk Nickel sagged 6.8 percent, and Gazprom was 3.4 percent lower.
A short-term growth is possible on the Russian stock market in the near future, Boris Yesin of Maxwell Asset Management told RBC Daily. He ascribed the decline to uncertain investor sentiment. Henry Paulson’s $700 billion plan to bail out the US economy was likely to pass through the House of Representatives, Yesin said, expecting the Russian market to rebound in the period after the plan’s approval and up until it begins to take effect on the US economy.
Mikhail Stroganov, head of the interbanking operations department at RosEvroBank, said the situation on the interbanking market was improving. The Central Bank is supporting the country’s largest markets, which in their turn help smaller banks. Banks are also regaining confidence in each other. Natalia Orlova, chief economist at Alfa Bank, agrees that the interbanking market is stabilizing. She expects this tendency to continue until the middle of October, when large tax payments are due. |
