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Foreign Capital Heads Out in 3rd Quarter
Russian Central Bank representatives stated on Friday that the country may experience a net outflow of capital in the third quarter. The reason is a peak in payment of foreign credits by Russian companies, especially Rosneft. Russian companies will pay $100 billion on foreign debts this year on the whole, with $22 billion of that coming from Rosneft. In spite of a net outflow of $22.8 billion in the first quarter of the year, the net influx in the first half year totaled $12.5 billion. Officially, the Central Bank is predicting a net influx of $40 billion this year (compared to $82.3 billion last year).
Rosneft has stated repeatedly that it has accumulated the funds for the payment of its debts, in spite of the lessening access to Western funds. The cost of new credits for Russian companies is rising fast. TMK (the Pipe Metallurgical Co.) is paying 10.25 percent annually on its Eurobonds and about 20 Russian companies are waiting for a window to make IPOs.
Analysts mainly agree with the Central Bank’s forecast. They note that Moody’s recently raised Russia’s rating from Baa2 to Baa1 with a positive outlook and acknowledge that many Western investors and consulting firms see Russia as a haven for investors leaving markets in developed countries. However, they say that, if the U.S. economy worsens, investors will leave Russia. If corporations are hit by the financial crisis in developed countries and the price of oil falls to $90 per barrel, economists say the net outflow of capital from Russia will be about $38 billion.
www.kommersant.com
All the Article in Russian as of July 21, 2008
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