This exactly confirms our expectation that as MinFin and the CBR are taking over the capital markets’ regulatory agenda and the liberalisation of financial markets, the latter is likely to accelerate. In light of Euroclear already clearing OFZs and most likely starting to handle corporate bonds within months if not weeks, technically everything is ready for equities to be added within the timeframe proffered by Siluanov.
Meantime, the locals/DRs discount, having tightened materially since July-September wides (caused by the delays in the launch of the Central Depository and the aforementioned directive), are still significantly wider than the levels of some 5% attained briefly in summer 2011 after the then President, Dmitry Medvedev, suggested the removal of DR limits. Siluanov’s statement establishes a well defined timing for the fungibility of DRs. Even with best intentions, the practicalities are more likely to be completed after the New Year holiday season, in our view – although in light of the recent rhetoric a more expedited outcome is a possibility.