Alexander Baru, Head of the Sales and Marketing Department of the Criminal Code “Raiffeisen Capital”
The likelihood that the Russian stock market will be able to recover after the deepest fall in just one month is quite small. Especially taking into account the fact that the fundamental causes of the fall have not yet been allowed. The most likely scenario, from our point of view, is the gradual restoration of the Russian stock market as the situation stabilizes on world financial venues. Given the scale of the credit crisis and the global lack of liquidity, it may take a longer time to recover than it was previously, during the first wave of fears. Thus, the recovery process will largely depend on how effective the US authorities are to stabilize the situation in the financial sector.
In addition, a negative impact on the market can be exerted in the case of a significant reduction in oil demand due to the slowdown of global economic growth and the reduction of oil prices to levels below $ 70 per barrel.
Therefore, for institutional investors, which include insurance companies, aggressive strategies in the context of instability on world stock venues and more and more clearly manifesting concerns of slowing down the rate of economic growth in the world, from our point of view, are unjustified. We would recommend that this category of customers adhere to conservative investment strategies related to investing in highly rental tools of the debt market. First of all, these are government bonds, as well as debt instruments with acceptable risk and state support. Also, much will depend on a specific situation in a single company and on its readiness, and most importantly, the opportunity to take on additional risks associated with the placement of insurance reserves for investment purposes. The best option for placing funds for any insurance company will be the option that implies the best profitability at an acceptable level of risk, as we have already said, in the current situation this ratio can be provided with investments in state and quasi -state tools of the debt market.