Russian assets rise on absence of new sanctions against Moscow

MOSCOW, March 25 Tue Mar 25, 2014 3:55am EDT

Related Topics

MOSCOW, March 25 (Reuters) - Russian assets rose on Tuesday as the Group of Seven major industrialised nations declined to impose new sanctions against President Vladimir Putin for annexing Crimea and threatening the rest of Ukraine.

Exporters converting their foreign currency revenues to pay monthly taxes gave a helping hand to the rouble, lifting it by 0.5 percent on the day against the dollar.

At 0725 GMT, the dollar-denominated RTS index gained 0.8 percent to 1,140.5 points. The rouble-traded MICEX was 0.1 percent up at 1,298.3 points.

At a meeting on Monday during a larger nuclear security conference in The Hague, the G7 nations suspended their participation in the G8 - which includes Russia - until Putin changes course. They warned of further possible moves against Moscow, but did not impose any new sanctions..

The United States and the European Union last week banned visas and froze assets for a group of Russians close to Putin. Economists reckon the risks from the situation in Ukraine are not over yet.

"Countries on the receiving end of significant U.S. sanctions do not have major financial markets," Kingsmill Bond, an analyst at Sberbank Investment Research, wrote in a note. "This is the key risk for foreign investors in Russia, as we estimate that they own 70 percent of both the equity free float and the Eurobond market."

Yields on Russian Eurobonds stopped rising after climbing on average 100 basis points since Putin declared Russia's right to invade Ukraine in early March. They were still oscillating around two-year highs.

Yield on the benchmark Eurobond maturing in 2030 was 5.19 percent on Tuesday, little changed from the previous session.

The rouble was 0.5 percent stronger on the day at 35.84 against the dollar and 0.6 percent firmer at 49.62 versus the euro.

This has left the rouble up 0.5 percent at 42.06 against the dollar-euro basket the central bank uses for gauging the rouble's nominal exchange rate.

Mineral extraction taxes, due on Wednesday, are expected to take 220 billion roubles ($6.10 billion) to 260 billion from the market. Friday's deadline for income tax will demand another 300 billion roubles or so.

"(The taxes) should support the rouble, but the main risk is still associated with any moves by the West and new sanctions, uncertainty of which remains," analysts at ING Bank in Moscow wrote in a note.

For rouble poll data see

For Russian equities guide see

For Russian treasury bonds see

Russia in graphics: link.reuters.com/dun63s

($1 = 36.0913 Russian Roubles) (Reporting by Lidia Kelly; Additional reporting by Vladimir Abramov; Writing by Lidia Kelly; Editing by Larry King)

FILED UNDER: