Daily Market Monitor: October should become a “hot” period for the ruble bond arket

October should become a “hot” period for the ruble bond
market. After summer’s timeout and September’s take-off,
the primary market will move on at full speed. Three large
placements planned for Oct. 6 will be the major market driver
in the coming days. The Central Bank intends to place its new
Rub 34bln OBR bond issue “to the market.” The target yield
was set at 6%+ and the paper has a nine-month put-option.
The Moscow City government will place two issues – a twoyear
Rub 3.9bln and a 10-year Rub 10bln, while Southern
Telecom Company plans to place a Rub 3.5bln five-year
issue with a 1.5-year put-option. We expect that despite
significant total value all these issues should face healthy
demand, as the market has been waiting for these new
instruments for a long time.

The Eurobond market followed benchmarks on Friday, the
latter declining on quite a good economic report from the US
Institute for Supply Management. As a result, 10-year
Treasury bond yields increased 7bps over the day. Russian
papers were marginally lower with EMBI+ Russia declining by
0.1%, though sovereign spread contracted by 4bps. We expect
that benchmarks will remain the major market driver in the
coming days. As there is little news on the US economy over
the week, the most significant influencing factors will be US
economic reports on Friday.