CentroCredit Bank

CentroCredit Bank The CentroCredit Bank is operating and actively developing as a universal customer-oriented bank laying special emphasis on the investment banking.

The CentroCredit Bank was established in 1989. In 1991, the Bank obtained the Central Bank of Russian Federation General License № 121. The CentroCredit Bank is operating and actively developing as a universal customer-oriented bank laying special emphasis on the investment banking; therefore much attention is given to the diversification of the services provided and to the establishment of the up

-to-date infrastructure necessary for the successful business. The CentroCredit Bank is a member of the Association of Russian Banks, the Professional Association of the Registrars, Transfer Agents and Depositories ('PARTAD'); it is also a member of the Russian Trading System ('RTS') and the Moscow Stock Exchange ('MSE'), as well as a shareholder and a member of the Stock and Futures Market Sections of the Moscow Interbank Currency Exchange ('MICEX'). The existence of the Federal Commission for the Securities Market of Russian Federation (FCSM) Licenses to perform all the types of business at the stock market shall enable the CentroCredit Bank to provide comprehensive services at the Russian stock market to a broader circle of customers, foreign investors included. The CentroCredit Bank offers its customers a full line of the cash and settlement and investment services. We are striving to establish an individual approach and firm relationship with each customer, meeting the highest professional standards. We possess all the requisites for being financial advisors and trading intermediaries for our customers. The CentroCredit prepares its financial statements in accordance with the Russian and the International standards. Its Auditor in 1999-2002 was the KPMG company, in 2003-2014 - "Deloittе&Touche", and since 2015 - "Ernst&Young" ranking among the world's major and most authoritative auditing companies.

21.02.2022‎RUSSIAN MARKET‎‎THE GROWTH OF THE RUSSIAN ECONOMY IN 2021 AMOUNTED TO 4.75%‎‎Rosstat presented a preliminary ...
23/02/2022

21.02.2022
‎RUSSIAN MARKET‎
‎THE GROWTH OF THE RUSSIAN ECONOMY IN 2021 AMOUNTED TO 4.75%‎
‎Rosstat presented a preliminary estimate of GDP for 2021 ‎
‎ • GDP growth in 2021 amounted to 4.75%‎
‎ • Based on the annual estimate, GDP growth in the 4th quarter can be estimated at 5.1% and 3.2% by Q4 2019‎
‎ • Nominal GDP - 130.8 trillion or $ 1.775 trillion‎
‎ • GDP per capita - 896 thousand rubles or $ 12.2 thousand (an increase of 20.0% per year)‎
‎ • GDP per capita - at a maximum since 2014, but 24% below the record level of 2013, when it approached $ 16 thousand‎
‎ • GDP growth over the past 10 years - 14.2%‎
‎ • Average annual growth rate over the past decade - 1.34%‎
‎ • GDP growth over the past 7 years (since 2014) - 7.1% ‎
‎ • Average annual growth rate over the past 7 years - 0.99%‎

‎INFLATION: TRIPS TO TURKEY ADD A MESS TO WEEKLY DATA‎
‎From 5 to 11 February, inflation was 0.13% vs 0.29% and 0.19% in the previous 2 weeks. Price growth since the beginning of February - 0.30%, since the beginning of the year - 1.29%. ‎‎The annual figure is 8.8%.‎‎.‎
‎A significant contribution to the slowdown in inflation (-0.03 points) was made by Turkish trips, which fell by 6.1% after a jump of 7.5% a week earlier (volatility is associated with tours on March 8). The share of this service in the consumer basket in 2022 doubled to 0.41% - i.e. we spend as much on Turkey as on potatoes. Because of this, Turkey will now constantly make appearances with weekly data. Therefore, we give the bottom line in the table - inflation without taking into account Turkish trips. With the clearing of this factor, we see that inflation has decreased over the week. The growth of the CPI, as before, is inhibited by meat, eggs, building materials. But greatly accelerate milk, cucumbers / tomatoes, cars. By February, we expect price increases of 0.65% mm / 8.65% yy.‎

14/02/2022‎RUSSIAN MARKET‎‎AS EXPECTED, THE BANK OF RUSSIA RAISED THE KEY RATE BY 100 BPS TO 9.5% PER ANNUM, BUT THE SIG...
23/02/2022

14/02/2022
‎RUSSIAN MARKET‎
‎AS EXPECTED, THE BANK OF RUSSIA RAISED THE KEY RATE BY 100 BPS TO 9.5% PER ANNUM, BUT THE SIGNAL REMAINS TOUGH‎
‎We considered the most likely +100 bps from our Central Bank, although, as it was indicated at the end of the press conference, the option of +150 bps was considered. We consider the most negative point to be the preservation of the hawkish signal, namely: ".....if the situation develops in accordance with the baseline forecast, the Bank of Russia admits the possibility of a further increase in the key rate at the next meetings....." At the moment, CentroCredit expects that the peak of tightening of the monetary policy will be at the level of 10.5-11% per annum‎
‎Since the meeting was a reference, the regulator presented updated macro forecasts:‎

‎The most interesting points: ‎
‎ • The inflation forecast for the end of 2022 has been raised from 4-4.5% to 5-6%, but for the next year it is left unchanged at 4% ‎
‎ • The forecast of the average rate for the current year: ‎‎9-11%‎‎ (was: 7.3-8.3%). Since this is the average rate, such a range implies a fairly wide range of possible trajectories. This could be a stop at the current level and a decline below 9% by the end of the year. It can also be a movement of up to 11.5-12% at the next meetings and then fixing until the end of the year at the achieved level. Theoretically, it is possible to draw a trajectory of a sharp increase to 13-14%, but with a subsequent equally sharp decrease to 9-10% (an option that can be implemented, for example, in the case of sanctions). In general, the signal that can be considered from the forecast: ‎‎the Central Bank DOES NOT EXCLUDE FURTHER SIGNIFICANT TIGHTENING OF THE MONETARY POLICY, ALTHOUGH IT ALLOWS SOFTER OPTIONS‎
‎ • The forecast of the average annual rate for 2023 is increased from 5.5-6.5% to 7.5-9.0%, 2024 - left unchanged: 5-6%.‎

07/02/2022RUSSIAN MARKETOn february 11, the Bank of Russia is likely to raise the interest rate by 100 bps to 9.5% per a...
08/02/2022

07/02/2022
RUSSIAN MARKET
On february 11, the Bank of Russia is likely to raise the interest rate by 100 bps to 9.5% per annum.

Despite the fact that the markets have practically ceased to respond to geopolitics, the risk premium in the price of Russian assets remains, and it is very high. If it was not for this premium, the dollar/ruble at the current price of oil and other equals would be below 70.
But now movement there is unlikely, because everyone understands that geopolitical tensions can begin to grow again at any time.
The recovery of Russian markets after the January cataclysms is much faster than was expected.
There is, of course, the factor of stopping the purchase of currency by the Central Bank. But we will be very surprised if, with the movement of the rate at 74 (we are waiting for 74 this week) and the reduction of volatility to 15-16, the Central Bank announces its return.
We don't expect surprises at the rate. +100 bps on Friday is already a priority expectation.
The Bank of Russia has published the results of a survey of analysts, which it conducts on the eve of the "week of silence", and in which we also participate.
Results:
• Inflation forecast for 2022 increased from 4.8 to 5.5%, 2023/24 – unchanged at 4.0%
• GDP growth forecast for 2021 increased from – 4.3 to 4.4%; 2022: 2.4%; 2023 – growth from 2.0 to 2.1%
• The forecast of the average annual values of the interest rate for 2022 was increased from 7.8 to 9.1%, for 2023 – from 6.3 to 7.3%, for 2024 – from 5.5% to 6.0%

31.01.2022‎RUSSIAN MARKET‎‎Domestic public debt: growth has stopped, it is no longer possible to borrow in conditions of...
07/02/2022

31.01.2022
‎RUSSIAN MARKET‎
‎Domestic public debt: growth has stopped, it is no longer possible to borrow in conditions of minimal demand from the department‎.
‎The domestic public debt of the Russian Federation in 2021 increased by 1,735 billion rubles (+ 11.8%) to 16,486 billion, which is approximately 12.5% of GDP (there is no exact estimate of GDP21 yet) compared to 13.8% of GDP at the end of 2020.‎
‎Domestic public debt is represented mainly by securities, which account for 15,760 billion or 95.8% of the total debt. In the portfolio of securities, the main share is occupied by Federal Bonds (with a fixed coupon) - 9,813 billion securities with a floating rate tied to Ruonia amount to 4,709 billion. ‎
‎Last year, the Ministry of Finance spent a little less than 1.1 trillion rubles (interest expenses of the federal budget) on servicing the national debt.
The growth of domestic public debt with the onset of military escalation in November 2021 slowed down - it became difficult for the Ministry of Finance to place Federal Bonds. Now the market is almost frozen (there is no demand at 10% per annum). And the Ministry of Finance still needs to borrow, because at a cut-off price of $ 44.2 (everything above this price goes to buy currency for the NWF), revenues do not converge with expenses.‎

24/01/2022‎RUSSIAN MARKET‎‎SLOW DOWN IN SALES CONTRACTS REMAIN‎SUnfortunately, events in the Russian market of the loca...
27/01/2022

24/01/2022
‎RUSSIAN MARKET‎
‎SLOW DOWN IN SALES CONTRACTS REMAIN‎S
Unfortunately, events in the Russian market of the local state mortgage continue to develop according to a rather negative scenario, and the dynamics of Federal Bond Market quotations looks extremely pessimistic, and the yields of some issues have already exceeded the mark of 10%. As an attempt to equalize the situation in the foreign exchange market, the Bank of Russia decided to stop buying foreign currency in the domestic market from January 24 for an indefinite period. The regulator assures that it has in its arsenal enough tools to maintain financial stability. But as for currency purchases, then:‎
‎THE PURCHASE OF FOREIGN CURRENCY WITHIN THE FRAMEWORK OF THE BUDGET RULE IN 2021 AMOUNTED TO ONLY 35% OF THE CURRENT ACCOUNT SURPLUS‎
‎In 2021, the Ministry of Finance under the BP bought out currencies for about $ 42 billion, which is only 35% of the record surplus of the current account (SRT), recorded at the end of the year in the amount of $ 120.3 billion. ‎
‎These figures illustrate the moderate impact of BP transactions on the balance of currency supply and demand in the domestic market. The weakness of the ruble with a record surplus of service stations is not the result of the operations of the Ministry of Finance, but of the outflow of capital (high demand for foreign assets), provoked, first of all, by geopolitics.‎

17/01/2022RUSSIAN MARKET‎‎ Russian risks have increased significantly: investors fear the deterioration of the geopoliti...
20/01/2022

17/01/2022
RUSSIAN MARKET‎
‎ Russian risks have increased significantly: investors fear the deterioration of the geopolitical situation, and there is also uncertainty about the further policy of the Bank of Russia‎.
Growing expectations of a faster Fed rate hike and an imminent folding of the balance sheet have not yet been particularly reflected in the dynamics of the national debt of developing countries. Since the beginning of the year, we have observed only a jump in rates in Brazil (a story related rather to the domestic situation - high inflation and the upcoming elections this year) and Russia. The yields of the Russian national debt returned to the levels of early 2016, and this is the result not so much of expectations at the rate of the Bank of Russia, as of the growth of geopolitical risks. However, the growth of these risks and the complete unpredictability of the further development of the situation may force the Central Bank to act more decisively. We are increasingly inclined to believe that at the meeting on February 11, the Central Bank may raise the rate by 100 bps. In case of escalation of risks, the national debt of the Russian Federation may catch up with Brazil‎.
‎On Friday, the 5-year CDS in Russia jumped another 17 bps to 175 bps - max since April 2020. We have not observed such a sharp increase in risks since the Covid crisis in March 2020. The stock continued to collapse, the Mosbirzhi index (-2.12%) closed at a minimum since May 2021. The dollar / ruble went to 77, but by the close it rolled back to 76.16, at the same time, volatility increased (1M implied vol – 17.05). Yields in the Federal Bond Market rose to the levels of the beginning of 2016. 6-7-year securities rose in yield to 9.7% per annum. And most likely, it was the rally in oil that prevented even greater trouble in the Russian markets.‎

‎Geopolitics will continue to be a key factor this week. The degree of tension was raised very strongly (threats of missile deployment in Cuba and Venezuela turned out to be sensitive for the United States, judging by the reaction). According to the law of the genre, now the pendulum can swing a little down. We do not rule out that this week's rhetoric will become a little more peaceful.‎
‎What is really pleasing this year is the continuing decline in prices on world food markets, primarily wheat. Soybeans and corn begin to unfold down. ‎
‎We noted that it is the correction of world food prices that largely determines the trajectory of the rapid return of inflation in Russia to the target. If this correction happens, then the target can be seen by the end of the year, if not, then, apparently, in mid-2023.
‎THE ANNUAL INFLATION RATE ON JANUARY 10 COULD REACH 8.6 PERCENT‎
‎Rosstat confirmed the preliminary estimate of inflation for December (0.82% mm / 8.39% yy) and reported a strong increase in prices since the beginning of the year. From January 1 to January 10, inflation was 0.56%. This is higher than it was a year ago - then in the first 11 days of the month prices rose by 0.40%. Based on these figures, the annual inflation rate can be estimated at 8.6%.‎
‎Responsible for high inflation at the beginning of the year are designated cars and fruits. High growth rates were maintained in dairy products, cereals, grain products. The fare in public transport has risen in price very much. At the same time, the reduced growth rate of prices in meat products remained.‎

10/01/2022‎RUSSIAN MARKET‎‎DOMESTIC DEMAND REMAINS THE MAIN DRIVER OF ECONOMIC GROWTH‎‎Rosstat before the New Year publi...
20/01/2022

10/01/2022
‎RUSSIAN MARKET‎
‎DOMESTIC DEMAND REMAINS THE MAIN DRIVER OF ECONOMIC GROWTH‎
‎Rosstat before the New Year published data on GDP on the demand side. The table below shows the dynamics of the main demand components. All indicators in real terms (in 2016 prices).‎
‎The figures suggest that domestic demand remains the main driver of economic growth. Final domestic demand is growing much faster than GDP. Both consumer demand (households: +10.3% yy) and investment demand (GFCF: +7.7% yy) are growing faster. ‎
‎For the first time since the beginning of the Covid crisis, export dynamics have turned positive. But import growth far outpaces export growth, so net external demand (exports minus imports) continues to make a negative contribution to GDP dynamics. Such a strong growth in imports with a relatively weak ruble is a little surprising. The explanation seems to lie in the area of continued incentives from ostwork and the budget. In 2022, the situation may begin to change. But we are not sure that the growth drivers will change from internal to external‎
‎In 2022, the positive contribution of exports to GDP dynamics is likely to increase, and the contribution of households will decrease, but will still remain positive. ‎
‎GDP growth in 2022 will probably slow down by half – from 4.8% in 2021 to ‎‎2-2.5% in 2022‎.

20/12/2021‎RUSSIAN MARKET‎‎ECONOMY – POST-CRISIS TRENDS‎‎Rosstat last week presented data on GDP for the 3rd quarter of ...
24/12/2021

20/12/2021
‎RUSSIAN MARKET‎
‎ECONOMY – POST-CRISIS TRENDS‎
‎Rosstat last week presented data on GDP for the 3rd quarter of production. The graphs show the dynamics of gross value added (GVA) by main types of activities in real terms (in 2016 prices). The blue bars are the accumulated total for Q4, and the red line is the share in GDP. The graphs show how the structure of the economy is changing. In our opinion, the following ‎
‎ Trends:
• Large-scale degradation of education, whose share in GDP has already fallen‎below 3% (everything is just like in textbooks - commodity authoritarian economies‎ are not interested in the development of education)
• Steady growth of the financial sector, whose share in GDP is approaching 6% (a consequence of growing debt load of the population)
• Very rapid recovery of trade after the crisis (confirms the reorientation of demand from external to domestic)‎
‎• The crisis has‎ given a boost to the construction sector
• The epidemic has given a boost to health care growth (but growth is weak so far – only 4% above 2014 levels)‎

13/12/2021‎RUSSIAN MARKET‎‎THIS FRIDAY WE ARE WAITING FOR +100 BP FROM THE BANK OF RUSSIA‎‎The market has no doubts abou...
24/12/2021

13/12/2021
‎RUSSIAN MARKET‎
‎THIS FRIDAY WE ARE WAITING FOR +100 BP FROM THE BANK OF RUSSIA‎
‎The market has no doubts about raising the rate of the Bank of Russia at Friday's meeting, while expectations are leaning towards +100 bps. In our opinion, +100 bps is completely in price, and only a signal can affect the public debt market. If the Central Bank makes it clear that 9% at the rate is not the limit, then the Federal Bonds curve will again, as after the October meeting, move up. We don't think that's going to happen. We are waiting for the softening of the rhetoric of the Central Bank after raising the rate to 8.5%‎.
‎SLOWING INFLATION WILL SOON BECOME APPARENT‎
‎The Central Bank estimated the seasonally smoothed growth in November at 0.85% vs 1.07% in October. In terms of the year, we get 10.75% mm saar in November. The same indicator, smoothed over 3 months - 12.01%. The last time such price growth rates were observed in the spring of 2015. ‎
‎The main inflationary factor in November was food prices, primarily meat and dairy. At the same time, fruit and vegetables showed an uncharacteristic decline for November. This is partly due to a shift in harvesting. Back in August, we were weak, but in the autumn we managed to catch up, and as a result, by year we can harvest a higher number of crops than last year. ‎
‎There is a steady decline in inflation in goods (with the exception of gasoline). Here, the figures are at a minimum since March, although still very high (7.75% mm saar). ‎
‎We are waiting for a more pronounced reversal of inflation trends. The Monetary Policy acts on inflation with a lag (3-6 quarters), so the increase in rates in 2021 throughout 2022 will have an increasing impact‎.

06/12/2021‎RUSSIAN MARKET‎‎Money supply growth accelerates again‎‎The volume of money supply (M2) at the end of October ...
08/12/2021

06/12/2021
‎RUSSIAN MARKET‎
‎Money supply growth accelerates again‎
‎The volume of money supply (M2) at the end of October amounted to 60,814 billion Dynamics: 0.3% mm / 8.8% yy vs 1.3% yy / 8.2% yy in September. With the elimination of seasonality, M2 growth was 1.2% mm sa vs 1.1% in September and 1.0% in August. Growth in May-July was 0.3-0.5% mm sa, but in August-October we already see 1.0-1.2% mm sa with a tendency to accelerate. The acceleration is associated both with the growth of budget expenditures and with the positive dynamics of lending.‎
‎The observed acceleration in M2 growth increases pro inflationary risks for the next year.‎

World food prices at highest since june 2011‎

‎The FAO Food Price Index, calculated in USD, showed the following dynamics in November: 1.2% mm and 27.3% yy (in October it was 2.8% mm / 31.0% yy). Grain (3.1% mm/23.2% yy) and dairy products (3.4% mm/19.1% yy) made the largest contributions to November growth, while vegetable oils adjusted slightly (-0.2% mm/51.4% yy). Meat prices have been declining for 4 months in a row (-0.9% mm / 17.6% yy). ‎
‎The weakening of the ruble strengthened the growth of the ruble index (converted into rubles at the average exchange rate for the month): 2.9% mm and 20.4% yy (in October it was 0.7% mm / 20.5% yy). The growth of the ruble index was the maximum over the past 7 months. ‎
‎The gap between global food prices and domestic food prices (bottom left chart) remains impressive, meaning that price pressures from global food markets may persist for quite some time. A stronger ruble could significantly reduce price pressure from the outside.‎

29/11/2021GLOBAL MARKET‎‎Federal Bonds market doesn’t exclude the possibility that instead of raising the key rate to 8....
08/12/2021

29/11/2021
GLOBAL MARKET‎
‎Federal Bonds market doesn’t exclude the possibility that instead of raising the key rate to 8.5%, Bank of Russia may begin to reduce it‎.
‎Against the backdrop of a global risk-off that affected all Russian assets, the Federal Bonds market turned out to be an island of stability. We believe that investors have reasoned correctly – if the scenario of spring 2020 is repeated in the world, then Bank of Russia, instead of raising the rate to 8.5% (which was expected a few days ago), may begin to reduce it.‎
‎Interestingly,

In the event of the implementation of the scenario of the intensification of the pandemic, Bank of Russia intends to conduct a softer preparation in comparison with the baseline scenario‎.

‎In this scenario, the Bank of Russia forecasts in 2022 the average annual level of the key rate of 6.3-7.3% (in the baseline scenario - 7.3-8.3%), inflation at the end of the year - 4.5-5.0% (4-4.5% in the baseline scenario). ‎
‎Recently, we have repeatedly heard from the Bank of Russia statements about the most resolute intentions to nail inflation to the target by the end of next year. But as can be seen from the forecast given here (you can read more about it in the Main Directions of the Monetary Policy for 2022-24 starting from page 35), if there is still a repetition of the pandemic crisis in the world according to the scenario of the spring of 2020, then the Bank of Russia will not tighten the screws much, moreover, it will reduce the rate in the first half of 2022. ‎
‎In this scenario, the Central Bank expects oil prices to fall to $50 per barrel. Economic growth will be close to zero by the end of the year. And household consumption will fall significantly - by 2.8-3.8%‎
‎GDP growth rates in 2022 will be close to zero, in 2023 they will accelerate to 3.5-4.5%, and by the end of the forecast horizon they will return to values close to potential growth. The influence of persistent inflation factors will decrease earlier than in the baseline scenario, which will make it an expedient mitigation‎.

Bank of Russia considered such a scenario:

24/11/2021

22/11/2021
‎Russian market‎
‎The end of the lockdown returned inflation to its previous trend‎.
‎From November 9th to November 15th inflation was 0.18% vs 0.09% while being 0.21% in the couple of weeks piror. Price growth since the beginning of November is 0.30%, since the beginning of the year - 6.81%. The annual rate is 8.10%. ‎
The unexpected slowdown in inflation in the first week of November, in our opinion, was due to the lockdown, which may have created problems with the observation of a number of positions. Now the trend has returned. Once again prices of meat and dairy products, cereals, pasta, bread, sugar, eggs, going up. In non-food products, the growth is more targeted, but cars are steadily becoming more expensive. The correction continues in building materials.‎
‎Our inflation forecast for November: 0.7-0.8% mm / 8.1-8.2% YoY. ‎‎From the Central Bank, we expect a rate increase of 100 bps to 8.5%‎

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