Sale of government debt securities Investors may pursue various goals. Due to the funds raised, the budget deficit is covered, state investment program and projects are funded.
In Russia, the US Department is carried out by the Government, which establishes the limit volumes of the public debt for the next fiscal year, approves the general terms and conditions for the appeal of government debt securities, and also accepts other key decisions on this issue. But immediately emissions and service of issues of governmentobaligations exercise the Ministry of Finance from its own person, attracting the Bank of Russia as a general agent.
The volume of planned borrowing is regularly published on the official website of the Ministry of Finance and are available to familiarize themselves with everyone. Directly itself primary placement OFZ occurs through auctions that in scheduled mode are carried out on a weekly basis every Wednesday.
Accurate schedule for the next quarter agency also publishes online However, in some cases, when the market situation does not allow to attract funds at the required rate, the auction can be canceled, as reported in the appropriate press release.
The form of the auction in the form of auction allows you to estimate the real market conditions and understand what kind of yield investors are ready to lend a state. A high level of demand allows the state to count on the following placement on more low percentage According to loans, while low demand, on the contrary, talks about the need to give an investor a greater profitability or wait for a more suitable market situation.
Who participates in the auctions of the Ministry of Finance
Buyers of debt securities on the primary market are mainly the major institutional and private investors, which, due to capital size, cannot be without loss of profitability to buy paper on the secondary market. Also, investors can expect that due to low demand at the auction will be able to get more profitable termsthan in the secondary market.
Theoretically, anyone can take part in the auction. However, in practice, brokers and banks that provide customers with access to the auctions of the Ministry of Finance can establish certain restrictions on the minimum amount of capital or provide such a service only separate category customers.
For an ordinary private investor, the volume of investments of which does not exceed 20-30 million rubles, liquidity in most of the OPZ issues is quite enough to purchase securities on the secondary market. If you operate with more substantial amounts or count on a big yield, you can contact your broker to participate in the auction.
How is auction
Auction is carried out through a special trading system based on the Mosbierry infrastructure. There, on the site of the Exchange, the day before the auction publishes a press release, where the releases offered at the auction, the time of submission of applications and other features are indicated. As a rule, the Ministry of Finance proposes two or three output from the auction with different terms repayment.
The auction participants can submit two types of applications: competitive and non-competitive. Competitive applications are executed exclusively at the price specified in the application, and can be fully or partially satisfied with the Issuer. Non-competitive applications are satisfied at the weighted average price of auction in the presence of a suggestion.
Why analysts watch the auctions of the Ministry of Finance
According to the results of the auction, the Exchange publishes the results. Based on the weighted average profitability that has formed at auction, market participants estimate fair returns on securities and general market sentiments.
A significant exceeding the demand over the amount of placement or discount in the auction profitability compared to the price in the secondary market - these factors are talking about high demand and a possible decrease in the yield on the papers in the future. It also matters on paper with what maturity duration is higher.
On the contrary, if the release was not fully posted, it was placed with the yield premium or auction was generally canceled, then this is an explicit signal for the market that the demand for securities is low and fair yield on the market may be higher than the state offered by the state.
Galaktionov Igor
BKS broker
Etc., but, this excursion would be incomplete, I do not mention another extremely popular and that the main thing is a reliable asset for stock trading, namely. About them and let's talk in this article.
As opposed to classic exchange tools, I want to bring binary options in which the trader is able to receive fixed profits up to 90% of the amount of investment with a contract expiration date from 1 minute and more. With proper capital and system management and system management, binary options can become an excellent addition to classic types of trading and investment.
Where to get started on the market binary options? One simple and profitable options is the company in which the minimum shopping deposit is $ 10, and minimum size trading position $ 1, which will be interesting for those who wish to only try this type of trading, or start trading with minimal investments.
According to the already established tradition, the features of source trade will begin with the definition of the essence of the asset.
Bonds of the federal loan - These are securities, the issuer of which is the Ministry of Finance Russian Federation. Released in the form of registered documents, on the conditions of compulsory centralized storage.
The trade of OFD on the MICEX and the timing of their appeal can be both secondary and long-term. And as owners can act as physical and legal entities (including foreign).
As I said, OFZ is distinguished by centralized storage, and the general agent for their, exchange and storage is central bank Russia.
Types of Offs on MICEX
The bonds of a federal loan, which are listed on the Moscow Stock Exchange can be divided into several large groups:
- OFZ with variables (unknown) coupon - Owners of such bonds have the right to receive income on them for certain periods. Often they occur two or four times a year. At the same time, the magnitudes of the bond yields and the amount of their bet is formed under the influence of a plurality of factors and is determined shortly before the payment period.
The denomination of such bonds is 1000 rubles, and the rate of treatment varies from one year to five years.
- OFZ with constant coupon income - The size of such coupons determine directly the Ministry of Finance, and the yield of this type of source does not affect the yield of short-term government bonds (in contrast to the previous species).
Nominal - 1000 rubles, the frequency of payments is 1 time per year.
- OFZ with fixed coupon income - not to be confused with the previous type, because Here yield on bonds varies depending on the time in which income is paid.
The frequency of payments is 4 times a year. The term of circulation is from four years.
- OFZ with debt depreciation - The most "young" type of bonds, which is only gaining popularity. Income by bonds is paid by parts in different time periods installed in advance
The term of circulation is from 1 to 30 (!) Years. Nominal - 1000 rubles.
Advantages of investing in OFZ
The main advantage of working with bonds of a federal loan is their high reliability, because there is no one to the issuer here, but the state itself. Also among positive Parties OFF trade can be allocated:
- A fairly decent profitability percentage is significantly higher than that can be obtained at a deposit contribution.
- High income rate in rubles.
- The ability to enter and withdraw money throughout the day.
Quotes OFZ on MICEX
Quotes of bonds of the federal loan, the schedule of their profitability, current prices And the other things important for traders and investors can be found both on the official website of the Moscow Exchange, where the OFZ is devoted to a whole section and in any other resource of financial subjects. But, it is natural that the most relevant and timely information will provide only the stock exchange and your trading broker.
This is how the rate of profitability on the site looks like:
Here you can also find the amount of the estimated profitability of various bonds, indicating their most important indicators.
In principle, this is all that I wanted to tell you. If anything in the process of trade in bonds of the federal loan or conditions on which it passes, it remains incomprehensible to you - leave comments, and together we will analyze all the obscure moments. Well, while all, to new meetings.
Sincerely, Nikita Mikhailov
So, the Central Bank raised the interest rate by 0.25 PUNT to 7.5% - which means that the bonds fell, and the yield increased by them. Approximately such a development of events we expected and wrote about it in our group VK And also recently published a learning article on bonds on this concept as.
Now it is the time of the promised review of the bonds. Today there will be only the first part, where we will generally consider those OFS, which can now be interesting, and in the second part we will already give a specific recommendation and buy something in your portfolio.
OFZ on the Moscow Stock Exchange
Unfortunately, there is no access to the QUIK terminal - so we will use the data from the Moscow Exchange website (there is no duration indicator and it is bad, therefore there will be 2 part of the review).
Why will we watch the OFZ? After all, there are still corporate bonds, the yield on which may be higher. Yes, this is true, but also the risks there may be much higher. We generally proceed from the fact that OFZ is the most reliable investment tool on the Russian stock market (more reliable than a deposit in Sberbank). And this most reliable tool can give a very good yield. Therefore, we take off, and for more risky investments we have shares.
On the website of the Moscow Exchange, I found 39 OFZ. Please note - I sorted the list by the date of repayments, from the closest to the distant. That is, as we have already written in our article about - at the top of the list there will be bonds with a smaller duration (\u003d risk), and at the bottom with more.
List of OFZ
I will not consider everything here - you can do it yourself. I quickly run through the list and highlight those bonds that may be interesting, but first need to talk about the search criteria and the main thing about our choice strategy.
IPZ bond selection strategies
In fact, there are only 2 strategies, in one we increase the rate of the Central Bank (bonds fall, the yield is growing), and in the second decreases (the bonds grow, the profitability falls).
Strategy 1 "The rate of the Central Bank in the future grows"
In this case, we expect that in the future the rate of the Central Bank will grow, and therefore the bonds will fall (so that their profitability increases). Then it is more profitable for us:
- Buy Bonds with low duration (neighbor), as they will fall less (less loss from market price changes)
- Buy bonds at a price cheaper than the denomination (as in the event of a fall, we will have the opportunity to simply wait for the maturity of the nominal)
- Buying offs only on a small part of the funds (in the future bonds will be more rented and need to leave funds to buy more)
Strategy 2 "The rate of the Central Bank in the future falls"
In this case, we expect that in the future the rate of the Central Bank will fall, and therefore bonds will grow (and their profitability will fall). Then it is more profitable for us:
- Buy bonds with high duration (long-distance), as they will grow more (more profit from changing market prices), and coupon we will get longer
- Buy bonds for the price as cheaper than possible nominal value (it will be possible either more expensive, or calmly wait for repayment)
- Buy offs on all available money (in the future yield will fall) to fix excellent interest income
As you can see, it turns out that the strategy 2 plays our hand - but the main question is to find the time when it starts to be implemented. Now say something is definitely very difficult. We have just seen on the contrary, raising the rate of the Central Bank, which gives us the basis of thinking about strategy 1, in which we must behave most carefully.
I would have yet suggested watching more in the direction of strategy 1 (that is, be careful) and at the same time noted that buying bonds at a price lower than the nominal (2 item) for us is beneficial in both cases.
Bonds under the strategy 1
- Yield: 7.76%
- Repayment date: 11.12.2019
- Last price: 99,05
- Yield: 8.08%
- Repayment date: 05/27/2020
- Last price: 97,63
- Yield: 8.13%
- Repayment date: 14.04.2021
- Last price: 99,14
- Yield: 8.15%
- Repayment date: 08/18/2021
- Last price: 98,75
- Yield: 8.27%
- Repayment date: 24.11.2021
- Last price: 96,88
- Yield: 8.32%
- Repayment date: 15.12.2021
- Last price: 96,75
As you can notice - the yield is growing with increasing duration (\u003d risk) or growth of the repayment date.
I will start with the fact that if you want to know the accumulated coupon income On the current date, it can always be viewed on the website of the Moscow Exchange MOEX.com or on the Interfax website RusBond.Ru
Do not surprise the fact that the NKD values \u200b\u200bon the website of the Moscow Exchange and the NKD values \u200b\u200bon the Interfax Agency site differ from each other. This is due to the trading regimen on the Moscow Stock Exchange. The bonds of the federal loan are traded in T + mode, that is, with the calculations transferred to the next trading day. Therefore, the NKD on the website of the Exchange for the OFZ is always greater than the site on the interfax agency website.
Important post
The calculation technique presented in the article is not suitable for all bonds. The number of days of the coupon period can be calculated in various bases. I recently came across a methods with a methodology for calculating bond yields and accumulated coupon income on the website of the Moscow Exchange. I do not remember in which of the sections of the Exchange portal I found it, so I post it here for free download.
In the archive offered to download, except the technique, I attached an Excel file with the construction of graphs for stocks. Here is a reference to download: the methodology for calculating the NKD and profitability download
I will be glad to your opinions and personal experience in the field of bonds, when you share them in the comments to this article. I will be glad to questions too and I will try to find answers on them, and maybe they are already known to me - ask questions in the comments to the article, do not hesitate to answer everyone.
That's all for today, my dear readers.
Yesterday, the Moscow Exchange reported the upcoming change in the commodity regime by the bonds of the federal loan (OFS). From April 27, anonymous trade OFZ (in the main section) will be possible only in T + 1 mode. This mode implies calculations on concluded transactions in one day and partial predemption money and valuable papers. Until now, the trade of OFZ (as well as bonds in general) was dominated on the stock exchange in T0 mode - with calculations on the day of the transaction and 100 predemption. From March 23 to April 26 will last transitional period, during which it would be possible to make transactions both in T0 mode and in T + 1.
The Moscow Exchange gradually translates trading in various markets to T + mode. So, bidding with shares, shares and RDDs since September 2013 is translated into T + 2 mode. On the bond market the opportunity to trade in T + 2 was, but, as earlier in the stock market, until investors had the opportunity to choose, they traded in the mode that was familiar to them. As a result, for example, according to the results of March 13, the volume of trade of OFZ in T + 2 amounted to 2 thousand rubles. Now the entire main market OFZ is translated into T + mode. Make transactions in T0 after April 27 it will be possible only in the non-anonymous regime of negotiation transactions (RPS). "The share of anonymous trades in the total bonds of bonds over the past two years reached 16% of OFZ. Our goal is to offer all categories of participants. convenient way trade through partial provision of transactions and postponed settlements, "- commented on the innovation Managing Director for stock market Moscow Exchange Anna Kuznetsova. The question is why the T + 1 mode was chosen for OFZ, and not t + 2, as for stocks, shares and RDDs, left an unanswered on the stock exchange.
The decision of the Exchange on the transfer of major bidding of OFZ to the new regime was taken on the recommendation of the Profile Committee (the stock committees include, in particular, brokers and managers), said the stock exchange. However, not all market participants believe that the innovation will benefit them. "The manager of this regime is not available - the brokers do not provide them with partial predemption services, that is, in the case of a paper purchase, the entire amount is blocked immediately," indicates the management portfolio of Raiffeisen Capital bonds of Konstantin Artemov. "Our company works mainly with managers, institutional investors who carry out their transactions on the terms of 100% security, regardless of the auction regime," Aleksey Kuznetsov recognizes the chairman of the Board of Directors of the BC region.
Market participants working with institutional investors believe that the new production regime of OFD probably could be interesting to retail investors. "The popularity of debt instruments and private investors is growing, whose share in the volume of sources of government reached 6%," notes Anna Kuznetsov. However, brokers working with private investors were pretty indifferent to innovation. "For individualswhich are the basis of the client base "Opening-Broker", there is no fundamental difference between T0, T + 1 and T + 2 for the trade of OFS, "says CEO brokerage company "Opening" Yuri Mintsev.
