Russian authorities have moved to ease growing signs of tension in the country’s banking system, with the central bank temporarily suspending accounting rules and readying plans to inject capital and liquidity into the sector in a bid to ease the pressure.
Russian assets could suffer an even greater rout if the sovereign loses its investment-grade status.
Russian oil giant Rosneft is expected to repay a US$7.6bn portion of a bridge loan that matures on Sunday. The settlement day for the repayment is Monday December 22, the first business day after the loan matures.
Bonds from Western banks with high exposure to Russia have been badly hit by mounting concerns over the intensifying oil and rouble crisis.
A 35% fall in house prices accompanied by a four percentage-point increase in base rates would trigger the conversion into equity of additional Tier 1 notes issued by three of the eight UK banks stress tested with this scenario by the Bank of England last week.
Emerging market bonds fell victim to indiscriminate selling last week, as weak oil prices and low liquidity sent investors running for cover ahead of potential redemptions.
As the market moved into the dog days of December last week, there were an unusually high number of ECM bankers in situ, making last-minute preparations for IPOs slated for early 2015.
Hong Kong’s IPO market ended the year with polarised results last week. While Dalian Wanda Commercial Properties managed to price the city’s biggest IPO of the year near the top of its targeted range, shares in funeral services group Nirvana Asia plummeted on debut.