Posted 16 сентября 2020,, 14:29
Published 16 сентября 2020,, 14:29
Modified 24 декабря 2022,, 22:38
Updated 24 декабря 2022,, 22:38
As finanz.ru reports with reference to a Bloomberg study, in some cases, investments in bonds of developing countries will allow investors to preserve and increase capital due to the forthcoming reduction in the rate of inflation.
“Charles Robertson, chief global economist at Renaissance Capital, expects inflation in South Africa, Brazil and Russia to rise until the second quarter of 2021 and then weaken for years thereafter”, - it said.
According to the economist, investors need not be afraid to buy bonds issued in “the world's worst-performing currencies”: South African rand, Brazilian reals and rubles. All of them have depreciated by more than 10% against the dollar since the beginning of the year, however, the prospects for investing in securities of developing countries may not be bad.
Robertson explains this forecast by the fact that the quotes of these bonds are based on the inflation scenario in the country in the next five to ten years.
"This means that if you can get a 1% advantage on 10-year local currency bonds - say inflation is at 1% or 2% over the next 10 years - then you can probably achieve significant returns", - the message says.
In the late 1990s, Robertson made the right bet on Romanian bonds. In 2016, he adequately assessed the prospects for the South African rand. The economist compares the current situation in Brazil, Russia, South Africa and Mexico with what happened in some Central European countries after the global financial crisis.
In the near future, Russia, which is experiencing a serious deficit of state budget funds, plans to issue a record amount of securities to the market. At the expense of loans, the Ministry of Finance intends to attract to the budget the funds necessary to finance top-priority expenditure items. At the end of August, Russia, seriously affected by the decline in oil prices and the coronavirus pandemic, lost about 20% of tax revenues. If investors find Russian bonds unattractive, the Russian government will have to cut government spending in the near future.