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OFZs: almost unchanged

The price action in OFZs was pretty slow yesterday. The longest end closed barely changed, while the belly of the curve felt heavy. Thus, RFLB 19 6.80 (YTM 7.16%) lost near 15-20bp in price. The auction for RFLB 16 6.0 (YTM 6.51%) saw subdued demand. MinFin sold only about 45% of the planned size. Weak market sentiment and the absence of a premium to the secondary market valuations are the main reasons for the subdued demand. Meanwhile, Interfax, citing an unnamed source in MinFin, reports that the ministry is planning to cut the borrowing plan. We do not think this will come as a surprise to anybody and is just a technical action. The net issuance of OFZs YTD is just RUB 61bn, according to our estimates, while MinFin’s plan is about RUB 450bn. Given the weak momentum in the market and only four months left, executing the plan in full would have been a challenge.
Maxim Korovin, Anton Nikitin
VTB Capital analyst


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