Jpmorgan Russian Securit... Share Discussion Threads

[honestmarty] 16/3/2022 10:50

Positive sounds emerging on a settlement.

POLY starting to move higher.

Strange no signs of a reversal here...

Yet

[loganair] 15/3/2022 17:12

For info:

Saudi Arabia is currently in talks with China to price some of the oil sales in Yuan instead of Dollars. This comes on the back of the sanctions on Russia after the Ukrainian invasion, and the global realization that diversification away from the dollar might be wise. As more and more small events like this happen, the global trend towards de-dollarization gets stronger - another straw on the camels back of de-dollarization.

[topvest] 15/3/2022 16:46

Thanks - all seems odd though if Russia is really that close to default. The rouble is certainly not worthless. Time will tell I suppose. A default would no doubt put more pressure on Putin and this pointless war!

[albert arthur] 15/3/2022 16:34

Looks like what happened here, after the initial crash is the price got traded to the £1.80p which was the EMA8, the spike got shorted around here, now there is a press to 85p, where it's expect it to then bounce back to the EMA8 once again, which is now circa £1.50p. I'm holding and buying tranches on dips.

[loganair] 15/3/2022 14:39

Rouble was 98 just before they went into the Ukraine, reached around 180 and is now back down to 144 to the pound.

As with all markets they go way to far in one direction before returning to a more balanced value.

Also when this all started Russians where going to the bank in droves to draw out all their Roubles to buy USD. Over the past week this has been reversed with Russians now putting their Roubles back into the bank where they can earn 20% in interest.

[topvest] 15/3/2022 14:32

Rather odd that the Rouble is strengthening significantly and has pulled back half of its losses. Any thoughts on why, if Russia is close to default?

[honestmarty] 15/3/2022 11:31

Putin must wish he had you as one of his staff generals loganair.

Let's hope they aren't reading this thread.

[loganair] 15/3/2022 10:06

Some emerging markets economies are now struggling to get hold of USD due to A. the strength of the USD and B. sanctions on Russia.

Often now when Russia does business with other countries, especially emerging market countries payments are no longer in USD and therefore these countries are having to find ways of doing business which does not include payment in the USD which in the end will show there is no need to trade mainly using the USD.

It seems to me, in the long run the sanctions on Russia by the United States are going to damage the USD and therefore negatively hurt the United States economy.

[loganair] 15/3/2022 09:05

In 2000, Putin was needed after the debacle of Yeltsin, especially Yeltsin selling on nationalised industries to his cronies for literally cents in the dollar which to some extent Putin has rectified.

With out Putin the oligarchs would take over Russia as they have done in the Ukraine.

The Putin/Medvedev seem to work very well up to 2012, then since has all started to fall a part.

[dabekt] 15/3/2022 08:58

Well, for what it's worth, I believe there will be no material change or peace in the foreseable future. Russia will continue to edge forward regardless of internal costs. No change until the top team / president changes.

[loganair] 15/3/2022 08:47

Chinese stocks are also falling heavily at the moment - and like with Russia, the locals are coming in to buy the stocks that the Westerners are desperately trying to sell.

"Even amid the rout, mainland traders have continued to snap up Hong Kong stocks, though that's proving insufficient to buttress share prices. They have been net buying Hong Kong equities via the stock connect in every session since Feb. 22, loading up $1 billion on Monday alone".

"It's true that the valuation is cheap but if you are desperately closing your positions, valuations don't matter," said Yasutada Suzuki, head of emerging market investments at Sumitomo Mitsui Bank.

[smithie6] 15/3/2022 08:40

...that is because they have loans to these companies ?

[loganair] 15/3/2022 08:36

Blackrock clients have seen their Russian ETF's etc fall in price from over $18bln to just $600mln, a loss of circa $17.5bln.

When it comes to Russia, overall, the Western banks are on the hook for over $100bln.

[soleman1] 14/3/2022 21:08

I think there will be a peace deal this week, following Putins rhetoric it seems he is in savage face move on mode. The shells and bombs keep landing but I believe in his mind continually applying pressure gets results. Hopefully the storm before the calm for the Ukrainians.

[loganair] 14/3/2022 20:32

Rather like a bank freezing a persons bank accounts, then that person being unable to make his monthly mortgage payment to the same bank.

[jonwig] 14/3/2022 20:28

Incidentally, today's telegraph:

International investors are poised to thrust Russia into default within days by rejecting a Kremlin offer to pay its debts in roubles.

Senior City fund managers said that they will refuse to take the Russian currency as payment if it is offered on Wednesday to settle a $117m (£90m) interest bill. The country may offer roubles as a bid to get round sanctions preventing access to its dollar reserves.

Russia admitted for the first time on Monday that it risks defaulting on its sovereign debt, and accused the West of using sanctions to artificially create a situation where it cannot repay creditors.

Russian finance minister Anton Siluanov insisted the country has enough money to meet its debt obligations.

A unilateral decision to pay the interest bill in Russian currency will trigger a default, three senior fund managers said.

[smithie6] 14/3/2022 19:24

Ukraine does seem to have a big advantages in soldier numbers

Men aged 18-60 not allowed to leave, have to fight.
~40 million Ukraine people
20 million male.
Say 15 million 18-60 yrs old ?

That is a lot of people....& with plenty of rocket propelled grenades & anti tank weapons.....just point & press the button....
...can be super difficult opponent/weapons, as seen in Afghanistan.

[jonwig] 14/3/2022 17:59

logan - from a rational point of view, yes. But that makes them (or rather him) more dangerous.

An article in this week's Economist describes something not much mentioned: the situation along the Poland-Ukr border. A huge amount of military gear is passing through, and men returning to fight (217,000 in the last ten days). This can be fatal to the Russians' objectives and could lead them into an error in attacking eastern Poland.
~~~~~~~~~~~~~~~~~~~~~~~~~~
galeforce - I believe some bonds have the rouble option, some not. Getting hold of the T&Cs isn't very easy!

[loganair] 14/3/2022 16:54

It seems to me Russia are in real trouble in the Ukraine. They are losing too many senior officers and if able to take Kiev will need 25,000 soldiers to just hold the city.

I do not think Russia will be able to take Lviv, because once they get that far, that is if they do, they'll have too few troops left to be effective against the city.

[galeforce1] 14/3/2022 09:45

Jonwig - that's an interesting point re USD-denominated Russian corporate bonds and the potential consequences of technical default.

But if the interest is paid in Roubles, at the insistence of the Russian govt, and if access to US$ by Russian companies is heavily restricted by Western sanctions, then these Russian companies can reasonably claim 'force majeure' IMO.

I suspect that the bondholders will not be seizing or 'freezing' (SO different!) Gazprom's assets any time soon.

[jonwig] 14/3/2022 09:01

loganair - Interesting! Yes, Neon gas:



Ukraine is a top global supplier of neon because it is a byproduct of Soviet-era steel mills in that country. It supplies a majority of the semiconductor industry's neon gas. Neon is used in the lasers that etch chip designs onto silicon wafers during the chipmaking process.

[loganair] 14/3/2022 08:57

I've been hearing, one of the commodities that goes into making microchips, that 50% of this commodity comes from the Ukraine.

[galeforce1] 14/3/2022 08:36

The danger for Zelenksy is that every day the Russians control more of the eastern half of Ukraine. Once this area is under their control, will Russia be prepared to withdraw?
That's a strong argument for Zelensky agreeing to Russian terms sooner rather than later, IMO.
Recognising Crimea and the Donbas as Russian territory inflicts pain on Ukrainian pride but not much else. But continuing the fight could lose half the country.

[jonwig] 14/3/2022 08:03

RBonnier - I don't think anybody can read the military/political situation, and I won't even try.

But there's a snag about whether the portfolio here is worth investing in. Gazprom honoured a USD bond just recently, and the large Russian quoted companies have always obeyed listing rules pretty well. If any of the companies defaulted on its bonds, the bondholders would be entitled to seize assets using a debt-for-equity swap.

Currently the Russian government holds 50%-plus of Gazprom, and bondholders seem to be mainly EU and US banks. So the rules would dilute the government out of existence (and JRS's holding would be mere pence), something which would be pretty unthinkable. I've no idea how the Central Bank would handle this - Elvira Nabiullina is a capable woman who follows the rules, but I don't think the rules would work there any more.