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Russian market settlement agency woos Chinese investors
September 16, 2016 / 9:16 AM / a year ago

Russian market settlement agency woos Chinese investors

MOSCOW (Reuters) - Russia’s National Settlement Depository (NSD) aims to establish a direct link for Chinese investors to give them easier access to the Russian market, NSD chairman Eddie Astanin said.

Chinese investors were already present on the Russian market, but using “London offices of large investment banks” to conduct their operations.

“We want to make this route direct,” Astanin told the Reuters Russia summit.

Part of the focus for the NSD - an institution that provides settlement services for Russia’s financial markets - is a possible issue of OFZ treasury bonds in yuan worth the equivalent of around $1 billion.

In May, the participation of the NSD enabled the finance ministry to bypass the world’s largest clearing banks, Euroclear and Clearstream, in conducting a landmark dollar Eurobond issue.

Astanin said a depository link between Russia and China “is in our focus as there are finance ministry plans to issue OFZ bonds in yuan, (and) there are plans by our issuers for corporate bonds in yuan on Chinese markets”.

There was no final decision whether the OFZ placement should happen on the Moscow Exchange or in China, with the latter option requiring a special approval from Chinese regulators.

The May Eurobond issue raised $1.75 billion out of total external borrowing of $3 billion that Russia has planned for this year, and Finance Minister Anton Siluanov said that Russia intended to rely instead on its own market infrastructure for future bond issues.

The ministry has yet to decide whether to top up the Eurobond or borrow via other instruments to help finance a budget deficit expected at around 3 percent of gross domestic product this year.

Additional reporting by Dmitry Antonov, Christian Lowe, Kira Zavyalova; writing by Katya Golubkova; editing by John Stonestreet

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