«Geopolitical risk remains the main one»
Among Russians, August is considered an «unlucky month»: too many shocks for our country fell on it in the 90s. Current events are once again making people anxious. The recent collapse of the Japanese stock market caused a wave of decline in stock indices around the world. It reached Russia, fortunately, in a weakened form. Then alarming events began in the Kursk region. Maxim Osadchiy, head of the analytical department at BKF Bank, told MK about what is happening in the country's financial market and how to protect your savings in an unpredictable environment.
Photo: ru.freepik.com
— Yes, the collapse mostly affected foreign stock exchanges. First of all, the Japanese stock market: the Nikkei 225 index fell by 12.4%. This caused a domino effect: the South Korean stock exchange index fell by 8.8%, the Istanbul stock exchange index by 5.5%, etc. The impact of these events on the Russian stock market was relatively weak due to the increased international isolation of our country due to sanctions: the Moscow Exchange index fell by only 2.4% on Monday, and by Wednesday it had already grown by 1.6%. In short, every cloud has a silver lining. The average Russian, the “man in the street,” most likely did not notice this cataclysm.
— Not exactly. Of course, the tougher the sanctions, the stronger Russia's immunity to such global upheavals will be. In North Korea, despite its proximity to Japan, it is unlikely that anyone paid attention to the events there, if only because North Korea has no stock market. However, the escalation of the global financial crisis into an economic crisis will also hit Russia hard due to its continued dependence on imported raw materials, the demand for which will fall sharply.
— First of all, due to the fault of the local regulator, who did not appreciate the consequences of a sharp change in monetary policy. For a long time, the Bank of Japan pursued an ultra-loose monetary policy, keeping the key rate at zero or even negative. However, on Wednesday July 31, he unexpectedly raised the rate to «about 0.25%» from «about 0 to 0.1%» (BoJ's wording) and outlined an action plan to wind down the bond purchase program. Tightening monetary policy contributes to the strengthening of the national currency, a decrease in net exports and economic growth rates. Accordingly, the yen began to rise sharply, and Japanese securities collapsed.
The «carry trade» was very popular on the Japanese currency market. Players borrowed yen in Japan at low interest rates, converted them into dollars, euros and other currencies and placed them in stocks, bonds and cryptocurrencies. However, this strategy collapsed in an instant due to the Japanese regulator raising the key rate and the sharp strengthening of the yen, causing multi-billion dollar losses for these players and massive sales of assets used in this strategy. Players who «shorted» the yen also suffered («short» — «sell without coverage» — «sell something you don't have», i.e. play for a fall due to a loan).
— In the past, carry trade was very popular here too. It would seem that you could borrow dollars, euros, yuan abroad at relatively low rates, convert them into rubles and place them in Russia at high rates, say, in OFZs or other reliable securities. Especially since the ruble is still relatively stable. But this strategy, alas, does not work, primarily due to the country's increasing isolation: even Chinese banks refuse to accept transfers from Russian credit and financial institutions.
—The events in the Kursk region began on Tuesday, August 6, immediately following the cataclysm in the world markets. However, what is happening has not yet caused alarm among participants in the Russian stock market, which even grew on Wednesday after «Black Monday». Nevertheless, geopolitical risk continues to be the main one for it.
— The situation in the mortgage and housing market in general is becoming increasingly alarming — due to the end of the preferential mortgage program, as well as the tightening of preferential mortgage terms. The terms of IT mortgages have also worsened, but it does not make the weather. According to preliminary estimates from Dom.RF, 51 thousand mortgage loans were issued in the first three weeks of July (-55% compared to July 2023) for 223 billion rubles (-48%).
It is well known that mortgage programs with state support have caused two main effects: firstly, an aggressive increase in housing prices and, secondly, a large gap in prices for the primary and secondary housing. Accordingly, in addition to a sharp decrease in issuances, the cancellation of preferential mortgages may result in a decrease in prices, primarily for new buildings, which will lead to a reduction in the gap. Due to the scale of the changes taking place, a crisis in the real estate sector cannot be ruled out. Moreover, market mortgages may even “fold” due to high rates — from 20% and above. However, there is good news: the crisis will definitely not start in the remaining days of August. And I advise Russians to wait until the end of the year with a mortgage, including with state support, since prices for the primary housing may decrease.
—The first “safe haven” — housing — has become unsafe. But the second “safe haven” remains, where investors take refuge during storms in the financial markets — gold. And you should avoid metal accounts. Only «hardcore», only physical gold. Better in bars.