Fitch: Liquidity of Russian companies stable.

By bne IntelliNews February 7, 2012
Fitch Ratings believes that liquidity of Russian companies remains stable due to active financing and refinancing in H1/11. At the same time, due to foreign investors avoiding risks as of July 2011, Gazprom was the only corporate issuer tapping foreign markets (with an Eurobond issue) in H2/11, which lead to higher dependency of Russian companies on state-controlled banks. Liquidity situation was also improved due to CBR's instruments towards the end of 2011, such as expansion of the Lombard List (list of collateral securities). Oil and gas sector has the strongest liquidity, Fitch believes, mining, metallurgy and communication sectors have improved their liquidity, while energy and utilities companies have the biggest problems with liquidity given strong need in investment and dependency on banking funding. Agency believes that crediting growth is going to decline to 20% in 2012 from about 30% in 2011, and given that banks will be able to borrow additional USD 30bn from CBR and FinMin, about USD 110bn are expected to be lended to the real sector. In turn, lower crediting growth is expected to cause the companies to revise their investment programs downwards, Fitch concludes.

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