Trade Brisk in Russian Risks
The Russian presence on the structured finance market – the market financial products on which the risks of financial and industrial products are sold – is growing rapidly. Moody's report on that market for the first half of the year shows that Russia accounted for a third of that market in Central and Eastern Europe, the CIS, North Africa and the Middle East.
Only Turkey surpasses Russia in the sale of derivatives. Forty-one percent of Russian securitization was of borrowings against future income; 37 percent was of mortgage credits, and 22 percent for automobile loans. The high proportion of auto loans is unusual, even in a region where structured finance is a new instrument. The average for the region, according to Moody's, is 53.2 percent for future cash flow, 23.4 percent for mortgages and only 6.9 percent for automobiles.
In any case, there is no doubt that Russian securitization will dominate the market for the next two years. Kazakhstan and Ukraine lag behind Russia in the development of that market, and the countries of the Persian Gulf and far behind them. The growth of the market is Russia could be characterized as “explosive.” In 2005, the total volume of that market, according to Moody's, was around $250 million. In 2005, it was $3.5 billion. In the first half of this year, it came just short of $2 billion. In 2004, it was $1.75 billion, but $1.5 billion of that amount was an unexpected securitization of cash flow by Gazprom.
www.kommersant.com
All the Article in Russian as of Aug. 10, 2007
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