Yuan stake – Kommersant

The Chinese currency is playing an increasingly important role both in the Russian economy and in the preferences of private investors. The increasing popularity of the yuan is facilitated not only by the growing toxicity of the dollar and the euro, but also by the improvement in the conditions for raising funds in this currency. For half a year, the yields of deposits of large banks increased from 1% to more than 3% per annum. Higher yields are added up on yuan bonds – 4-6% per annum. However, such investments should take into account the limited liquidity of individual issues.

Friendly Payment

Last week, in the Financial Markets Risk Review (.pdf) The Central Bank noted the continuing trend towards an increase in the share of the yuan both in payments for foreign economic transactions, and in the domestic exchange and over-the-counter markets. From March 2022 to March 2023, Russian exporters increased the volume of monthly transactions in Chinese yuan from $0.5 billion to $6.9 billion, and importers from $1.4 billion to $7.7 billion. As a result, the share of the Chinese yuan in the export structure amounted to 18%, and in the structure of imports – 27%. On the exchange spot market, the share of the yuan in April 2023 increased to 36.1%, on the over-the-counter market to 22.3%. At the same time, at the end of 2022, it was 31.5% and 17.6%, respectively.

The growth in demand for the currencies of friendly countries in the Russian market is a long-term trend dictated by the current geopolitical situation, according to a review of the Central Bank.

Under the current conditions, an increasing number of banks offer deposits in yuan. If at the beginning of autumn such deposits were available from the ten largest banks, now, according to Banki.rualmost 100 banks have such a product, while even the largest of them have rates of 3.2-3.5% per annum, while for half a year they hardly exceeded 1% per annum.

joint lifting

Higher rates are available to investors on the debt market, where more than 20 issues of 11 issuers are traded. At the same time, the yield on 2-3-year bonds of issuers of the first echelon is 3.7-4% per annum, 4-5-year – 3.5-6.4% per annum. “The yields of yuan bonds since the beginning of the year have behaved approximately the same as the yields of other currency instruments in the local perimeter – for short (up to a year) traded securities, they have not changed much, and for 3-4-year-old securities, prices have decreased, while yields have increased approximately 100 b. etc.,” notes Alexei Bulgakov, head of the debt market analytics department at Renaissance Capital.

The increase in yields at the beginning of this year was due to low demand from investors. On the one hand, Alexander Afonin, head of the bond market analysis at Sinara investment bank, notes that those wishing to place yuan have already taken advantage of the options offered by the market, and new buyers had to be motivated by higher yields. On the other hand, more interesting instruments have emerged, such as replacement bonds (SLBs), which offer much higher yields and offer the same benefits as RMB bonds. So according to the data Rusbondsthe yield on Metalloinvest yuan bonds maturing in September 2027 is 4.5% per annum, and replacement bonds maturing in October 2028 are about 7% per annum.

Looking for a fair level

Due to the fact that the local segment of foreign currency debt instruments is just being formed and exists separately from global markets, it is difficult to draw conclusions about the fairness or unfairness of the current pricing, Alexey Bulgakov believes. According to Alexander Afonin, the yield levels of bonds issued since the beginning of this year, in particular, the debut issue of Sovcomflot (yield of 5% per annum) and the second issue of Yuzhuralzoloto (about 4% per annum), look quite fair. “There is a category of “lagging behind” on the market, this is the majority of securities issued last year. Yields on them remain at low levels due to low liquidity and the unwillingness of holders to fix losses,” notes Mr. Afonin.

Analysts do not expect further strong growth of rates on yuan bonds.

The offer of such securities is limited, in connection with this, investors will have to be content with the existing rates. Moreover, as the market becomes saturated, the yield may again go down. “One can only assume that on the horizon of two or three years, as placements and additional placements of CAs stop and the volumes of yuan bonds stabilize, as deposits in “unfriendly” currencies are either washed out or converted, there will be a decrease in the yields on all currency instruments and a certain compression,” sums up Alexey Bulgakov.

Vitaly Gaidaev