Russian investors considering options for investing money should take into account not only the fact that the Central Bank (CB) of the Russian Federation raised the rate, but also the rhetoric of the regulator, says Sergey Rogov, head of private client relations at SberLife Insurance investment management.
The expert told Izvestia on July 24 about where to invest money with an increase in the key rate.
“Often for investors, the rhetoric can even be more important than the change itself – whether the increase will be a one-time increase or there will be a cycle of increases. In many respects, the strategy of forming an investment portfolio depends on this,” he specified.
Rogov noted that a high demand for bonds has been maintained for a long time.
“The main reason is profitability. And, most likely, the current increase in the key rate will cause a certain flow from stocks to bonds,” he explained.
In his opinion, as part of the rate increase by 1 p.p. it makes sense to purchase federal loan bonds (OFZ) with a constant coupon and a maturity of more than eight years for a part of the portfolio.
“It is for such bonds that it will be possible to fix the yield to maturity at a level of more than 11% per annum, as well as the opportunity to earn on price growth in the event that there are prerequisites for reducing the key rate. In OFZ maturing in 2039 and 2041, the yield could exceed 11.5% with near-zero risk,” he said.
At the same time, the expert added that if it is assumed that in the future the Central Bank will refrain from raising the rate, then a position in “long” OFZs (bonds with a long current maturity. – Ed.) can be formed confidently. But if there are prerequisites for a further increase in the indicator, then it is worth considering a gradual increase in the position depending on future inflation data.
“However, despite the flow into bonds, the stock market should not be written off. Despite the growing global risks associated with a slowdown in the Chinese economy and high rates in the US, there is enough liquidity both in the global system and in the Russian system. And in many respects this factor is able to push the market forward. At the same time, preference should be given to blue chips (shares of the largest and most stable companies. – Ed.), especially exporting companies, ferrous metallurgy and grocery retail, ”concluded Rogov.