At the end of the last meeting of the Federal Reserve System (FRS) the USA has promised to keep interest rates low until the end of 2014. In addition, Fed Chairman Ben Bernanke did not rule out a new stage of pumping the economy with money. Easing of monetary policy in the United States once led to an increase in stock price of credit institutions throughout the world. After all, they get the most benefit from the cheap funds.
U.S. Fed's decision to extend financial holidays, keeping interest rates at a minimal level until the end of 2014, brought the leaders in the stock market shares of the banking sector. On MICEX, RTS securities of Sberbank rose in price by 3.8%, VTB - 5.4%, Nomos-Bank - 10.3% Bank "Revival" - by 13.5%. A little behind the Russian credit institutions of developed countries: BNP Paribas shares rose 2,1%, Deutsche Bank - by 2,3%, Societe Generale and Morgan Stanley - by 2,4%, Citigroup - by 2,7%, ING - to 3,3%, Credit Agricole - 3,7%, Barclays - on 4,1%, Lloyds TSB - by 6.2%. As a result, the Russian indices have added up to the day 1,1-2,5%. The RTS index rose to values of the beginning of November last year, to 1573.04 points while the MICEX index values returned to the beginning of December, having fixed on a mark of 1514.72 points. European stocks rose for a day at 1.1-1.8%.
Last summer, the Fed was willing to keep rates at a minimal level (from zero to 0.25% per annum) until mid-2013. However, following a two-day meeting it was decided to extend further stimulate the national economy on a half years. In addition, Fed Chairman Ben Bernanke at a conference following the meeting did not exclude the possibility of the third round of "quantitative easing" if the U.S. unemployment will remain high. "With low inflation and sustained high unemployment will have to resort to additional measures to stimulate the economy - said Mr. Bernanke .- At the moment we are not prepared to say that the U.S. economy entered a phase of higher activity." According to portfolio manager "Alliance ROSNO Asset Management" Oleg Popov, such actions, market participants expected the Fed since last July. "The expectations of further inflows of liquidity into financial markets had a positive impact on investors' appetite for risk," - said Mr. Popov.
Since the banks' profit depends on the cost of borrowing in the market, the Fed's decision to keep rates as low as a positive impact on the financial sector. According to UFG Wealth Management partner Oksana Kuchura, because of "contamination effect" of poor quality assets of the banking sector was one of the most undervalued sector in 2011, but as the waning fears of investors began to "pick up" the cheapest paper. "Results of Fed meeting dramatically improved investor sentiment towards the banks, and the reason for it - the specifics of their business," - said Oleg Popov. Soft monetary policy always extremely beneficial for banks, which borrowed funds remain cheap for a longer period. In addition, such a policy would fuel inflationary expectations, which could push the desire of consumers to borrow, and companies - to invest in fixed capital, which is also beneficial to banks, summed up Mrs. Kuchura.
However, market participants believe that the further growth of verbal interventions by the Fed is not enough because there are still downside risks the world economy. Yesterday's unemployment figures in the U.S. confirms the fears of investors. According to the Ministry of Labour, the number of initial claims for unemployment benefits last week rose by 21 thousand - up to 377 thousand (forecast - 370 thousand), and the total number of applications for week ending January 14, increased from 3.466 million to 3.554 million (forecast - 3.5 million). "It is hoped that measures taken on Wednesday will be a catalyst for growth not only stock markets, but also the real economy - said Oleg Popov .- Nevertheless, the focus for investors will be events in Europe, where it is still not resolved the question providing financial assistance to Greece. "
U.S. Fed's decision to extend financial holidays, keeping interest rates at a minimal level until the end of 2014, brought the leaders in the stock market shares of the banking sector. On MICEX, RTS securities of Sberbank rose in price by 3.8%, VTB - 5.4%, Nomos-Bank - 10.3% Bank "Revival" - by 13.5%. A little behind the Russian credit institutions of developed countries: BNP Paribas shares rose 2,1%, Deutsche Bank - by 2,3%, Societe Generale and Morgan Stanley - by 2,4%, Citigroup - by 2,7%, ING - to 3,3%, Credit Agricole - 3,7%, Barclays - on 4,1%, Lloyds TSB - by 6.2%. As a result, the Russian indices have added up to the day 1,1-2,5%. The RTS index rose to values of the beginning of November last year, to 1573.04 points while the MICEX index values returned to the beginning of December, having fixed on a mark of 1514.72 points. European stocks rose for a day at 1.1-1.8%.
Last summer, the Fed was willing to keep rates at a minimal level (from zero to 0.25% per annum) until mid-2013. However, following a two-day meeting it was decided to extend further stimulate the national economy on a half years. In addition, Fed Chairman Ben Bernanke at a conference following the meeting did not exclude the possibility of the third round of "quantitative easing" if the U.S. unemployment will remain high. "With low inflation and sustained high unemployment will have to resort to additional measures to stimulate the economy - said Mr. Bernanke .- At the moment we are not prepared to say that the U.S. economy entered a phase of higher activity." According to portfolio manager "Alliance ROSNO Asset Management" Oleg Popov, such actions, market participants expected the Fed since last July. "The expectations of further inflows of liquidity into financial markets had a positive impact on investors' appetite for risk," - said Mr. Popov.
Since the banks' profit depends on the cost of borrowing in the market, the Fed's decision to keep rates as low as a positive impact on the financial sector. According to UFG Wealth Management partner Oksana Kuchura, because of "contamination effect" of poor quality assets of the banking sector was one of the most undervalued sector in 2011, but as the waning fears of investors began to "pick up" the cheapest paper. "Results of Fed meeting dramatically improved investor sentiment towards the banks, and the reason for it - the specifics of their business," - said Oleg Popov. Soft monetary policy always extremely beneficial for banks, which borrowed funds remain cheap for a longer period. In addition, such a policy would fuel inflationary expectations, which could push the desire of consumers to borrow, and companies - to invest in fixed capital, which is also beneficial to banks, summed up Mrs. Kuchura.
However, market participants believe that the further growth of verbal interventions by the Fed is not enough because there are still downside risks the world economy. Yesterday's unemployment figures in the U.S. confirms the fears of investors. According to the Ministry of Labour, the number of initial claims for unemployment benefits last week rose by 21 thousand - up to 377 thousand (forecast - 370 thousand), and the total number of applications for week ending January 14, increased from 3.466 million to 3.554 million (forecast - 3.5 million). "It is hoped that measures taken on Wednesday will be a catalyst for growth not only stock markets, but also the real economy - said Oleg Popov .- Nevertheless, the focus for investors will be events in Europe, where it is still not resolved the question providing financial assistance to Greece. "
No comments:
Post a Comment