«By buying these papers, you give the government a loan»
Government bonds are quite a popular investment instrument all over the world. Russia is no exception. The authorities have thought about issuing “patriotic” government bonds that will be distributed through banks, financial platforms and other financial institutions. It is possible that the new tool can be designed both for patriotic citizens and offered using administrative methods. Will the new bonds be successful and what could be the yield? Experts told MK about this.
“Probably, the goal is still financial and budgetary. Of course, the placement can be used as a patriotic occasion and will certainly not be neglected.
In the current conditions of relative stability of rates in the economy, the Ministry of Finance can already raise almost any amount of money, if the Central Bank first provides financial institutions, the main buyers of OFZ, with the appropriate liquidity. Demand can be additionally stimulated by offering yield premiums and issues with certain parameters.
The main feature, most likely, will be the channels for offering such bonds, namely through banks and financial institutions. This makes the instrument similar to OFZ-n (federal loan bonds for the population), which at one time partially replaced deposits for bank depositors. Like other banking products, OFZ-n were offered to a wide range of bank clients in person at branches, which made it possible to make government bonds a truly massive financial instrument.
“Bonds are issued by the Ministry of Finance of the Russian Federation — by buying them, you give the state a loan. The issue of «patriotic» bonds may be popular among many Russians, citizens who are ready to support the state in a difficult economic situation. Speaking about the form of issue, most likely the forms will be classic, as for ordinary OFZ traded on the stock exchange. Perhaps they will release some paper versions for citizens who do not know how to trade online through brokers.
The initiative is also designed for a wide range of people — both individuals and legal entities. Most likely, the mechanisms implemented during the issuance will not differ much from ordinary OFZs, while the name “patriotic” is more of a marketing goal in order to reach a large audience of potential purchasers. Speaking of yields, again, most likely, there will be no differences from ordinary OFZs, the volatility of which is quite low, and the income is obtained more through coupons.
The question is really interesting, whether this will be an exclusively voluntary story , or it will be a mechanism for helping the state on the part of not only citizens, but also companies that tacitly ask for such investments. For citizens, it is possible that some additional privileges will be provided upon purchase in order to stimulate investment.”