In October, participants of the Russian domestic debt market were inactive due to a lack of prospects for price growth and a great concentration of state short-term bonds (GKO) and federal loan bonds (OFZ) in the portfolios of the so-called passive investors. Unlike in September, the yield of state bonds declined amid a short-term rise in the total market turnover after Moody's raised Russia's sovereign rating, analysts with the Russian Central Bank pointed out.
In the aggregate, according to analysts, foreign factors did not exercise a considerable effect on the market of state securities. The low rates on these investment vehicles as well as the restricted number of liquid issues scare investors away.
Under the circumstances, low rates together with the strong dependence of the volume of attracted funds on several major investors may jeopardize the implementation of the Russian Finance Ministry's plan of financing the federal budget's expenses by floating state bonds.