Analyst told what to expect from higher S&P credit rating of Russia

© RIA Novosti / Vitaly to Belowaverage in footballacademy of the Standard & Poor’s. Archival photoAnalyst told what to expect from higher S&P credit rating of Russia© RIA Novosti / Vitaly to Belowaverage the image Bank

Increase of a rating of Russia to investment grade by Standard & Poor’s will provide capital inflow on the Russian stock market and will contribute to the strengthening of the ruble, but growth may be limited, says a senior analyst with IC «freedom Finance» Bogdan Zvarich.

International rating Agency Standard & Poor’s on Saturday raised the rating of Russia to investment grade «BBB-» with a speculative BB+, the rating Outlook is stable. The Agency Fitch affirmed Russia’s investment rating of «BBB-» with a positive Outlook.

«As for the reaction of the bond markets and shares and also the ruble, then, of course, the news on stable external background will become the reason for their growth. This contributes to the expectation of capital inflows into the country from funds that are guided by the ratings of S&P. In this case the main flow can be directed in Russian bonds,» — said Zvarych RIA Novosti.

At the same time, he notes that the increase may not be as great as many expect. The fact that some of the players have already laid the rating upgrade, which affected the dynamics of our assets in the last session, says the analyst. As a result, the inflow of new funds may face profit-taking that will hamper the growth of Russian assets, the expert adds.

«Of course, the rating upgrade is a positive factor and reflects the changes in the Russian economy, held in the last two years. So we can talk about the growth of resistance to external shocks, the resumption of GDP growth, improvement of the budget situation and the significant decline of inflation», — sums up Zvarych.

Source