OFZ Weekly Flows - February 28, 2022. Nonresident Outflows Continue; CBR Blocks Nonresident Selling

Last week saw a R101 bln net outflow of nonresident investments from the OFZ market. The outflow broke down to R31 bln at the short end, R50.7 bln in the belly and R19.7 bln at the far end of the curve. The share of nonresidents dropped 0.7 pp to 17.4%.It is important to keep in mind that the outflow figure reflects transactions in the first half of the week. In the latter half of the week, following the new round of Western sanctions against selected Russian banks and in light of the resulting increase in uncertainty (particularly about the legal implications), the market became extremely illiquid. This morning, the CBR announced that it would temporarily block nonresidents' sell orders for Russian securities. As a reminder, the Finance Ministry announced last week that OFZ auctions would not be held for the next few weeks. It also mentioned that it has around R4.5 trln on account at the Federal Treasury, which, given its R2.2 trln net borrowing target, gives it a certain amount of flexibility. Finance Minister Anton Siluanov also indicated that money from the National Wealth Fund could be deployed to help Russia meet its financing needs.> A R101 bln net outflow of nonresident money. The issues seeing the biggest outflows were the 9y OFZ 26239 (R11.8 bln), 5y OFZ 26207 (R10.5 bln) and 9y OFZ 26235 (R9.0 bln). The only inflows were into the 4y OFZ 26229 (R2.5 bln) and 14y OFZ 26240 (R1.0 bln).