The reason for the collapse of the stock market is the statements of the Russian Foreign Ministry about NATO’s unwillingness to meet the demands of the Russian Federation on security guarantees.
The Russian stock market on Thursday, January 13, accelerated the decline. Quotes of Russian Eurobonds fell due to increased geopolitical risks against the backdrop of the lack of positive results of negotiations in the Russia-NATO format. The pullback of the Moscow Exchange and RTS indices under the pressure of Western sales has become a record since March 2020. This is reported Interfax.
It is noted that following the results of the main trades, the Moscow Exchange index fell to 3674.73 points (-4.1%), the RTS index – to 1516.99 points (-5.9%); prices of the majority of “blue chips” on the Moscow Exchange fell by 7.3%.
The dollar rose to 76.32 rubles. (+1.61 rubles).
Shares of VTB (-7.3%), Sberbank (-6.6% and -5.3% prefs), OZON receipts (-6%), TCS Group (-5.3%), Magnit (-5 .6%), Surgutneftegaz (-5.1% and -1.8% of prefs), Aeroflot (-5%), LUKOIL (-4.3%), Rosneft (-4.3%), AFK Sistema (- 4.2%), NOVATEK (-3.7%), Gazprom (-3.5%), RusHydro (-3.1%), Severstal (-2.9%), Moscow Exchange (-2.7% ), Tatneft (-2.7%), MTS (-2.7%), Yandex (-2.6%), UC Rusal (-2.4%), Inter RAO (-1.4 %), NLMK (-1.1%), ALROSA (-0.9%), Gazprom Neft (-0.9%), MMK (-0.7%), PJSC Polyus (-0.7%).
US Treasuries remained almost unchanged in price on the day, which eventually led to a sharp expansion of sovereign spreads to the yield of underlying assets. The cost of a five-year default insurance (CDS) rose almost 23 basis points overnight to 160 basis points, the highest since the spring 2020 global panic due to the first wave of the pandemic.
The price of Russian government Eurobonds maturing in 2030 decreased by 72 basis points compared to the close of Wednesday and amounted to 112.2% of par, which corresponds to a yield of 2.415% per annum (an increase of 25 basis points compared to the previous day).
The cost of three-year American Treasuries grew by only 3 basis points during the day and amounted to 103.39% of the nominal value (yield decreased by 1.5 basis points to 1.025% per annum). Thus, the spread between the yield of Russia-30 and three-year US Treasury bonds widened by 26.5 points during the day, amounting to 139 basis points.
Quotes of Russian Eurobonds maturing in 2043 fell by 380 basis points compared to the previous close, amounting to 126.9% of the face value (yield increased by 22 basis points to 4.01% per annum). In turn, Eurobonds maturing in 2042 also decreased in price by 380 basis points, dropping to 121.24% of the face value (yield increased by 24 points and amounted to 4.07% per annum). Securities maturing in 2026 fell by 146 basis points, to 106.75% of par (yield increased by 34 basis points, to 3.08% per annum), with maturity in 2023 – by 64 basis points, to 104.37% from the nominal (yield increased by 36 basis points, up to 2.18% per annum).
The new thirty-year issue of sovereign Eurobonds of the Russian Federation with maturity in 2047 lost 394 basis points in price, depreciating to 117.04% of the face value (yield increased by 22 points and amounted to 4.16% per annum), and the ten-year issue with maturity in 2027 fell in price by 121 basis points, up to 105.5% of the nominal value (yield increased by 23 basis points – up to 3.14% per annum).
Russia in the OSCE demanded “security guarantees” from NATO
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