Posted on 11/18/2019 8:50:32 PM PST by NorseViking
Sorry, haters, Putin’s securities market is better than Xi’s, better than Trump’s. It’s Europe’s fault.
For all the talk about starving Vladimir Putin and, inevitably, Russia of financial resources with sanctions on major state-run companies, Russian bonds have become a must-have. Not only in Europe where yields are nearly zero, but also among American global bond fund managers that want to get paid for holding debt.
Considering there is about $15 trillion worth of negative-yielding bonds out there, Russia’s 10-year sovereign looks great to everyone, except to the most scornful of the anti-Russia crowd, at around 6.4% in rubles.
Russia’s 2027 dollar-bond pays 4.25% interest. Germany doesn’t pay at all, and instead yields -0.35%. The U.S. 10-year Treasury bond yields just 1.8%. Those countries also have debt burdens that can spook long-term investors. Russia has practically no debt at all.
Today In: Money “They’ve made themselves bulletproof,” says James Barrineau, co-head of emerging-market debt for Schroders Investment in New York. “They can pay off all their foreign debts with their central bank reserves. Plus, they’re cutting interest rates. The currency is very stable. And they have room on the fiscal side to spend on their economy.”
Russia has over $433 million in foreign currency reserves and $107.9 million worth of gold. It is the largest reserves among the big emerging markets after China, which has more than $3 trillion.
Ridiculously low interest rates on European government bonds, and higher dividends being paid by Russian companies, have investors overweighting Russian securities.
Here are some of Russia’s most well-known dividend paying stocks:
Retailer Magnit’s dividend yield is a whopping 8.62%. Its competitor X5 Retail Group pays 4.15%.
Lukoil, a privately owned oil company that even has gasoline stations in New York, pays 5.05%. Their stock price is up 39% this year.
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(Excerpt) Read more at forbes.com ...
Russian bonds have become a must-have. Not only in Europe where yields are nearly zero, but also among American global bond fund managers that want to get paid for holding debt.
Considering there is about $15 trillion worth of negative-yielding bonds out there, Russia’s 10-year sovereign looks great to everyone, except to the most scornful of the anti-Russia crowd, at around 6.4% in rubles.
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What has happened to Forbes. The reason those Russian bonds are paying high interest is because demand for them is way DOWN, thus their cost is way down and there fore the fixed interest they pay AS A PERCENTAGE OF COST is higher.
Rule of thumb...the RISKIER the bond, the higher the interest yield percentage... at least until they stop paying anything, neither interest nor principal.
Sound fiscal management.
The risk seems quite low given they can pay all their debt with held reserves.
The “deep state” and globalist coalition in the USA and EU have attempted to overthrow Putin, and surround and sow chaos in Russia.
A Russia that promotes a revival of its own Christian religion and culture, its own language, borders, nationalism and a multi-polar world is an enemy to the “New World Order.”
It hasn’t worked though. Trying to isolate Russia has only made them more independent, and more of an antithesis to the post-modern West. The ridiculous, incendiary charges of “Russia meddling” show exactly how the fevered-minds of Deep State in DC thinks.
Obama in particular seemed to have been a front man for those efforts, but his pathetic attempted regime changes in Ukraine and Syria, as well the chaos he caused in the mid-east and the flood of migrants into Europe has only strengthened Putin.
My God, where are the Forbes editors? The figures are clearly in $ billions, and even then, its widely assumed that Russia vastly understates its gold reserves.
Who and when stopped paying?
What “low risks” justify negative yields and on markets with trillions in debt no less?
Russian sanctions cost Russia around $50 billion. It cost Germany ten times that much and a million jobs. More so in East Germany traditionally geared towards the Russian market.
For how long do you think the german people would dance to the globalist tune and what would be the result?
I think the result would be positive for both Russian and German markets and not for the globalists once the worm turns.
Russians aren’t taking on unmanageable debt and doing anything crazy.
Americans on the hand who have a mountain of debt they can’t pay off, want to pile on still more.
Russians know what communism is like and younger Americans want to
embrace it.
Russia is doing better because they don’t have a choice and in spite of Western attempts to strangle their economy.
A starving man tightens his belt and lives for the future. Americans seem to want to live only for today.
That’s the difference between Russia and America. Go figure.
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