24.10.2025
Gold Hits a Ceiling. Now what?
Gold’s stellar run has finally hit turbulence. After months of relentless gains, the metal was knocked off balance by one of the sharpest pullbacks in a decade. Within days, prices slid from above $4,300 to $4,089 per ounce — a nearly 6% drop. For the first time in years, gold itself became a source of market instability, and that’s a warning sign worth paying attention to.
This year’s rally didn’t come out of nowhere. Geopolitical tension, expectations of a softer Fed, and steady central bank buying all pushed prices higher. The climb might have continued gradually if not for a familiar turning point: retail and institutional investors piling in out of FOMO. That speculative surge collided with a strengthening U.S. dollar — a rare and fragile combination. Historically, the two rarely rise together. Something had to give, and gold was the first to blink.
Now the market is facing two competing narratives. One camp sees this as the start of a deeper correction, potentially driving prices back toward $3,500 and flushing out speculative excess — a pattern not unlike the 2012 slide, when gold lost nearly 30% in six months and spent years recovering. Others argue the sell-off may simply be a pause before another leg higher, should the macro backdrop turn supportive again: a more dovish Fed, a weaker dollar, rising inflation expectations, or growing U.S. fiscal stress. Forecasts of $5,000 gold are making the rounds, though such numbers often say more about market mood than actual probabilities. Analysts tend to extrapolate: rallies breed optimism, declines invite doomsaying. Reality is rarely that linear.
For Russian investors, there’s an additional twist. The ruble is sitting on a compressed spring — inflationary pressure is mounting, oil prices remain soft, sanctions keep biting. A currency shock would make gold, as a dollar-denominated asset, an effective shield. Even if the international price softens, its ruble value could still climb meaningfully.
There are several practical ways to get exposure to gold through a brokerage account.
1️⃣ Gold ETFs — such as GOLD, AKGD, TGLD, SBGD — track the metal’s price and offer a simple, long-term holding option without storage issues. Fees vary from roughly 0.66% (GOLD) to 2.37% (TGLD).
2️⃣ The GLDRUB_TOM spot contract, priced in rubles, mirrors the gold price closely and cuts out intermediaries and management costs. It does, however, require access to the Moscow Exchange’s FX section and a bit more market savvy.
17.10.2025
Russia’s Dividend Diet 2025: What’s Weighing on Payouts — and What’s Keeping Them Afloat
The Russian dividend landscape in 2025 is caught between two opposing forces. On one side are macroeconomic headwinds and geopolitical risks; on the other — the financial appetites of major shareholders, many of whom need cash more than ever.
The biggest drag comes from elevated borrowing costs. With the key rate at its peak, companies carrying significant leverage are seeing interest expenses eat into free cash flow — the very pool from which dividends are paid. Firms facing refinancing in the coming year are particularly exposed, forced to roll over debt at punishing rates.
The strong ruble and weak commodity cycle add another layer of pressure. Exporters that once relied on favorable currency and pricing tailwinds are losing a key profit lever, which previously supported record-breaking payouts.
Banks, too, are not immune. Despite robust net interest margins, profitability could come under pressure as provisioning grows and credit quality deteriorates. Regulators have already flagged weaker earnings ahead, and major lenders — including systemically important institutions — are increasing reserves. That in turn limits their flexibility on dividends.
Taxes are another weight. A higher VAT rate will squeeze margins and likely push companies to raise prices, which may cool demand. There’s also the specter of ad hoc levies — like the windfall tax that hit Transneft last year — that can instantly carve away part of the profit base.
On top of that, large investment cycles in energy and infrastructure are competing with dividends for capital. Add to this the fog of recession risk, and boards are inclined to err on the side of caution.
Yet, not everything points down. One powerful counterforce remains: shareholder interests. The state — as the largest shareholder in key companies — has already penciled dividend income into the federal budget and will likely demand payouts even in a tougher earnings environment. This sets a floor for distributions at heavyweights such as Sberbank, Rosneft, and Transneft.
Private holding groups are also in need of cash flow from subsidiaries to service their own liabilities, reinforcing the pressure to pay.
Banks may also remain important dividend anchors, with Sberbank and others sticking to ambitious payout targets tied to IFRS earnings — even if those earnings soften.
Finally, a slowdown in investment activity could free up additional liquidity. High capital costs make some companies postpone growth programs, redirecting cash toward shareholders instead. This creates only temporary breathing room — but it supports dividends in the short term.
👉 The bottom line for 2025: dividend payouts are unlikely to surge — but neither are they set to collapse. Macroeconomic pressure is being offset by shareholder demands. This is shaping up to be a year of restrained distributions, where the decisive factor isn’t earnings growth but the financial needs of controlling stakeholders.
Looking ahead to 2026, lower interest rates could give companies more financial room, commodity prices may rebound, and a ruble devaluation — which many see as a question of “when,” not “if” — could inject fresh profit into export-heavy sectors.
For investors, the focus should be less on headline yield forecasts and more on balance sheet strength, ownership structure, and dividend discipline. Reliable payers tend to be those with low leverage, clear payout policies, limited capex plans, and a strong anchor shareholder — whether state or private — with a direct interest in regular cash flows. Consistency through previous crises is another critical marker.
10.10.2025
The Small vs. the Mighty: Why the Strong Don’t Always Win
Retail investors are usually portrayed as fragile creatures in need of protection. They’re seen as inexperienced, emotional, and prone to chasing trends rather than following rational analysis. Institutions — banks, funds, investment houses — are cast as the grown-ups in the room: deep pockets, sharp minds, sophisticated models. They’re supposed to always win.
There’s some truth to that image. Institutional investors operate with large teams — analysts, portfolio managers, risk officers, legal staff. Their systems are disciplined, processes rigorous, controls robust. A formidable machine, no doubt.
But there’s another side to the story — and it’s not often told.
The Constraints of Scale
Institutional investors don’t actually have unlimited freedom. They face hard limits on position size and liquidity. No matter how compelling an idea is, a fund can’t allocate more than a set percentage to a single name — often 10% or less. Nor can they buy tiny, illiquid stories that can’t absorb the capital. Ironically, the more successful a fund becomes, the more capital it attracts — and the narrower its investable universe grows, especially in a market like Russia.
Then there are mandate constraints. A stock fund must stay in stocks, even if the manager sees storm clouds ahead. A bond fund must remain in bonds. Moving to cash or hedging with gold may make perfect sense — but the rules don’t allow it.
And let’s not forget flows. When money comes in, institutions must buy. When money goes out, they must sell. Great ideas often die not because they’re wrong but because investors redeem their funds. Even entering and exiting trades is slow, bogged down by compliance and approval layers.
Incentives Shape Behavior
Many managers are paid for assets under management, not performance. Bigger funds mean bigger fees — regardless of whether clients make money. That naturally leads to short-term, optics-driven behavior. End-of-quarter “window dressing” is common: locking in gains not because the thesis changed, but because the report needs to look good. Bonuses depend on it.
This short time horizon discourages contrarian thinking. Being wrong together is safer than being wrong alone. A manager who sticks to consensus and loses money with everyone else keeps their job. One who takes a bold, unpopular bet and fails loses their career. That’s why herding behavior is deeply ingrained in the institutional world.
Systems Move Slowly
Big structures move with inertia. They’re often part of the system they should be questioning. That’s one of the key themes in The Big Short: major players didn’t miss the looming mortgage crisis because they couldn’t see it — they didn’t want to. Change is uncomfortable, and turning a big ship takes time. By the time they react, it’s often too late.
The Power of Small
This is where private investors may have an unexpected edge. They’re not bound by mandates, liquidity thresholds, or committees. They can take concentrated bets, sit in cash for months, or move into tiny opportunities that institutions simply can’t touch.
They can experiment, adapt, and — most importantly — learn. Every decision is feedback. Every market cycle builds skill. What looks like weakness — being small, alone, and outside the system — can actually be an advantage.
Interestingly, many professional managers keep their own portfolios simple. Some stick to conservative bonds, unwilling to live with the risks they manage for others. Others, like Sofia Kirsanova from Sber CIB, are willing to make highly concentrated personal bets — something they’d never be allowed to do with client money.
Flexibility Is a Superpower
Retail investors often underestimate their own position. They see themselves as underdogs, lacking insider access or institutional power. But what they have is freedom: the ability to be nimble, to make independent decisions, to learn faster than any bureaucracy can.
Being small isn’t shameful — it can be a competitive advantage, if you know how to use it.
03.10.2025
A New Hope: The Case for a Commodity Supercycle
Markets are rarely comfortable with uncertainty. When one big story fades, another inevitably takes its place. And the latest narrative making the rounds in boardrooms and fund presentations around the world is a seductive one: the return of a commodity supercycle.
A supercycle isn’t a seasonal rally. It’s a long, powerful wave of rising prices for energy, metals, and raw materials — not for quarters, but for years. We’ve seen it before. In the 1970s, oil shocks and a weak dollar lit the fuse. In the 2000s, China’s industrial boom devoured steel and crude by the hundreds of millions of tons.
Today, the key driver is the green transition. Clean energy isn’t actually “light” on resources — it’s the opposite. Electric vehicles, solar panels, and wind farms require far more metals and materials than fossil-fuel infrastructure. Copper powers cables and grids. Aluminum makes turbines and solar frames lighter. Nickel, lithium, cobalt, manganese, graphite — they’re the backbone of batteries. And that’s just a partial list.
Fossil fuels aren’t going anywhere either. Heavy transport, aviation, and shipping still depend on liquid fuels. Petrochemicals feed plastics and fertilizers. Emerging economies across Asia and Africa are just entering their industrialization phase, which means their energy demand is set to keep climbing. Oil may not be in structural decline for quite some time.
Then there’s the investment gap. Global spending on resource development has lagged behind demand for years. Oil capex never fully recovered after 2014 and is expected to fall another 6% in 2025. Copper investment is less than half of previous peaks. Lithium demand is projected to surge sevenfold by 2035, while new supply projects remain scarce. Nickel, aluminum, and graphite tell a similar story.
Add a layer of geopolitics: sanctions, trade blocks, wars. Supply chains fragment. Premiums rise. Nations race to secure their own production at higher costs. This kind of fragmentation tends to feed commodity booms rather than cool them.
Supercycle believers expect the early signs to emerge in 2025–2026, with the main wave — tied to EV adoption and the buildout of green infrastructure — arriving between 2026 and 2029. By the early 2030s, some forecast structural shortages of key metals. In other words, this isn’t about a quick trade — it’s a long arc that could define the decade.
Skeptics, of course, aren’t buying it wholesale. They argue that recent price gains reflect post-disruption rebounds, not a new secular uptrend. Global growth is fragile: Europe flirts with recession, China battles demographic drag, and trade tensions weigh on demand. U.S. and Brazilian oil output could balance the market. Commodity cycles, they remind us, have become shorter and sharper.
For Russia, a genuine supercycle would be a direct tailwind. The economy remains deeply tied to exports of oil, gas, metals, and chemicals. Higher global prices would lift export revenues, corporate profits, and, naturally, the stock market. Energy and metals producers could become engines of index growth, giving investors exposure to external rent flows.
This won’t happen tomorrow — or the day after. But the very possibility of a supercycle is enough to keep hope alive for long-term investors: positions opened now may not just survive but grow over the next 5–10 years.
The catch? For Russia to fully benefit, it would need real access to global markets again. But you probably knew that already.
27.09.2025
Bond Hunger Games
Yesterday we locked in profits and fully exited our long bond positions. It wasn’t panic — it was a deliberate decision. In the current risk setup, it makes more sense to keep what we’ve earned than to chase a rally that may or may not come. Could we have closed earlier? Probably. Could there be a bounce ahead? Possibly. But our entry into long duration was a tactical trade, not a marriage.
Why the exit now?
1️⃣ The 2026 federal budget draft is out. Revenues are projected at ₽40.3 trillion (+10% YoY), spending at ₽44.1 trillion (+4%), with a deficit of about ₽3.8 trillion — and that’s just the forecast. Debt servicing costs jumped 23% and now eat up nearly 9% of the budget. To make it work, VAT goes up to 22% and extends to small businesses.
2️⃣ The Ministry of Finance is tapping the market again. In Q4 alone it plans to issue an additional ₽2.2 trillion in OFZ to plug a fiscal hole that already exceeds ₽4 trillion after eight months.
3️⃣ Inflation is stirring. Official data show CPI rising 0.08% in a single week — twice the previous pace. The Central Bank is keeping rates high and sounding cautious, making clear that policy won’t ease until prices settle.
Put together, this paints a grim macro picture: rising taxes, swelling public debt, stubborn inflation, and a key rate that strangles growth even as it restrains prices. It’s a classic stagflationary setup — weak expansion, sticky inflation, and zero visibility on 2026 against a gloomy geopolitical backdrop and cheap oil.
No wonder the bond market looks like a battlefield. Long duration is the softest target: as yields rise, these bonds bleed first. Even if banks absorb the new supply, yields on mid- and long-term OFZ will keep climbing. Credit risk will come into sharper focus too — issuers with strong balance sheets will have the upper hand. Meanwhile, the market is starting to side-eye some large state-linked borrowers whose ratings lean heavily on the “implicit guarantee” narrative.
Our playbook now shifts from offense to survival mode. We’ll stick to short-dated corporates (up to two years) with clear credit stories and manageable duration — not perfect, but understandable. Yields remain above inflation, and risks are contained. A slice of the portfolio will also go into quasi-FX bonds as a hedge, not a core bet: ignoring devaluation risk right now would be wishful thinking.
This isn’t a growth market. It’s an adaptation market. The sooner you accept that, the better your odds of staying in the game.
12.09.2025
No Miracle This Time — Courtesy of the Central Bank
The Russia’s Central Bank just trimmed its key rate from 18% to 17% — the most cautious move on the table. Not lowering it at all would’ve looked too defiant; cutting it more aggressively would’ve signaled optimism the regulator clearly doesn’t share. The reasons are familiar: a swelling budget deficit, sticky inflation expectations, and accelerating credit growth.
Good or bad? Depends on where you’re standing.
✔️ For borrowers, the relief is mostly symbolic. Banks might shave a little off mortgage and consumer loan rates, but they’ll remain painfully high. If you were hoping for affordable credit to buy a new apartment, keep waiting.
✔️ For stocks, the signal is mildly negative. A bolder cut could have boosted demand, eased interest burdens, and lifted valuations through a lower discount rate. A single percentage point won’t move the needle. Don’t expect a broad rally — the market will likely stay in a sideways drift, and interesting stories will take longer to play out.
✔️ For bonds, the message is mixed. Holders of long OFZs may not like it: this confirms that rate cuts won’t be sharp or fast, increasing the odds of a correction in government debt. For corporates maturing in 1–3 years, the effect will be minimal, except for the most overpriced issues. New placements, however, may come with more attractive yields — good news if you’re sitting on cash. High ruble rates could also ease pressure on the currency, giving local bonds an edge over FX-linked ones.
Bottom line: the “quick money” scenario is dead. We’ve entered an era of slow, cautious easing, persistent risks, and chronic uncertainty. This is already the second big hope shattered this year: first came the geopolitical disappointment, now — the monetary one.
Investors can no longer count on easy wins from falling rates or magical macro turnarounds. The game has changed. From here on, survival will depend not on what the regulator does, but on your ability to build a portfolio that can handle prolonged turbulence.
03.09.2025
Three Sharp Takeaways from Yesterday’s Live with Dmitry Golubkov
Our conversation with Dmitry Golubkov — researcher, analyst, and investor with 25 years of experience — was packed with substance. The full recording is available separately, but here are the key points worth holding on to.
1️⃣ Macro: Between Inflation and Recession
Russia’s economy is still walking a tightrope. On paper, GDP is growing — but mostly thanks to the defense sector. Civilian industries are stuck in stagnation or outright decline, something even loyal government economists are now acknowledging. Corporate earnings confirm it: rising leverage, soaring borrowing costs, shrinking profits, slipping ratings.
In this environment, keeping rates sky-high deepens the recession in the non-military economy. But cutting too fast risks reigniting inflation, given limited capacity, low productivity, and import barriers.
Golubkov sees the most likely outcome as a “middle path”: gradual rate cuts paired with persistently elevated inflation. The key rate could slide toward 15%, but CPI will likely remain well above the official 4% target. That would require the Central Bank to abandon the hardline stance it just reaffirmed.
As a loose analogy, he mentioned Turkey — high growth plus high inflation — but with an important caveat: Turkey remained open to capital, plugged into global trade, and fueled by consumer demand. Russia, by contrast, operates in a sanctions-driven, mobilized economy with limited trade flexibility.
2️⃣ FX: The 30% Question
The sharpest part of the discussion was about the ruble. Golubkov believes there’s a “monetary overhang” — too many rubles chasing too few dollars. Under the right conditions, that could trigger a rapid 30% devaluation, not a slow drift but an avalanche: emotional demand for foreign currency combined with exporters holding back FX sales.
It’s a plausible scenario, but it rests on the assumption that the early-2022 dollar rate of ₽78 was some kind of “equilibrium.” That’s debatable — the market was already in stress mode then, and the very idea of a fair or stable ruble exchange rate looks shaky today.
A panic-driven selloff would almost certainly provoke a regulatory response: tweaking the fiscal rule, forcing exporters to sell, maybe even a short-term rate hike. So a sharp move is possible, but its probability depends on how tightly the state keeps its grip on currency flows.
3️⃣ Portfolio: What the Pros Do
Golubkov’s own portfolio speaks volumes: gold, foreign currencies, export-linked assets. This is someone with 25 years in the market, and he’s choosing capital protection and global diversification, not local hype like IPOs or high-yield speculative bonds.
Of course, that strategy isn’t equally accessible to every retail investor in Russia. But the message is clear: big players are positioning for resilience, not quick wins.
No Calm, No Clarity
And yet — all of this depends on a single variable: geopolitical de-escalation. Without it, every forecast remains half-formed. Rates may drift lower, inflation may swing, the ruble may strengthen or weaken, companies may improvise. But it all happens within the logic of a mobilized economy, where the stock market is secondary.
29.08.2025
The Autumn of Pessimists: Less Hope, More Experience
The summer rally is fizzling out. Where in July the market clung to hopes of falling inflation, a dovish Central Bank, and maybe even a geopolitical thaw, September has a different soundtrack: budget deficits widening, prices creeping up again, sanctions talk growing louder. So much for a “golden autumn” in the markets.
🥲 From January to July, the federal budget deficit reached nearly ₽5 trillion — already more than in all of last year. Revenues totaled about ₽20 trillion, spending exceeded ₽25 trillion. The non-oil-and-gas gap alone has blown past ₽10 trillion.
How will the government fill that hole? Three familiar levers:
1️⃣ The National Wealth Fund, which has around ₽4 trillion of liquid reserves left — hardly enough for long.
2️⃣ More bond issuance. Most of the new OFZ will likely end up in the portfolios of major banks and funds, whether they like it or not, though some supply will spill onto the open market, pushing yields higher.
3️⃣ Higher taxes. We’ve already seen profit tax hikes and a progressive income tax in 2025. There’s no reason to assume that’s the end of the story.
All of this points to sustained demand for capital — and therefore prolonged high interest rates. With fiscal spending still heavy, the Central Bank has every incentive to keep rates elevated to contain inflation. That means higher-for-longer isn’t just a slogan — it’s the base case.
Where does that leave investors? Based on recent experience, here are a few defensive havens worth considering:
1️⃣ Short-term corporate bonds (1–2 years) from solid issuers with strong balance sheets, clean business models, and predictable cash flows.
2️⃣ Floaters, which can protect against rising rates — though widening credit spreads can sting, especially on longer-dated or lower-quality paper.
3️⃣ Quasi-FX instruments, a hedge against a sharp ruble slide of 15% or more. They’re not about yield (typically 5–7%) but about insurance.
4️⃣ Selective equities — companies with pricing power, resilient revenues, and low debt. That’s a 2–3 year bet, not a trade for tomorrow.
5️⃣ Liquidity funds, the quiet workhorses that did well in last year’s high-rate environment.
And what to avoid?
❌ Long OFZ and long-dated corporates. These ideas only work if rates fall sharply — and that’s not the scenario on the table.
❌ Low-grade credits. Weak balance sheets plus expensive debt equal rising default risk.
❌ Highly leveraged equities. High rates are a hard ceiling on their growth potential.
Maybe the pessimists are wrong. Maybe the skies will clear, the deficit will shrink, and inflation will melt away. But we’ve heard that story before. Until it happens, staying closer to the cash register may be the smartest move.
22.08.2025
Gold Surges. But For How Long?
Gold suddenly broke higher today after the Fed Chair hinted at a potential shift in monetary policy. The metal jumped out of its trading range and gained roughly 1% in minutes. As I write this, spot prices hover around $3,370 per ounce. Before getting too excited, it’s worth unpacking what’s really behind the move.
For months, gold has been off the front pages. No surprise: after rallying nearly 30% early in the year, it’s spent the summer stuck in a narrow $3,200–$3,400 range. But for Russian investors, gold-linked instruments remain one of the few accessible hedges against FX risk — so the question of “what’s next” matters.
The pause in gold’s rally isn’t mysterious — it’s the result of a tug of war.
1️⃣ Strong structural support. ETF holdings reached 3,639 tonnes by the end of July (+15% YoY), central banks kept buying (166 tonnes in Q2), and overall quarterly demand hit 1,249 tonnes (+3%). That kind of base doesn’t make for easy sell-offs.
2️⃣ Powerful headwinds. High real yields and a strong dollar keep gold’s appeal in check: it doesn’t generate income, and storage costs are real. After a massive rally earlier this year, profit-taking set in, and with no fresh catalyst — no sharp dollar weakness, no surge in central bank buying, no geopolitical shock — momentum simply dried up.
The result is a sideways market: big buyers cushion the downside, while macro headwinds and routine profit-taking cap the upside.
Powell’s remarks briefly changed that equation. The hint of easing sent real yields lower, the dollar weaker — and gold instantly more attractive. Add in a month of consolidation, and the breakout above the range triggered algo buying and short covering. But that kind of fuel burns fast.
The bottom line: don’t expect a runaway rally or a crash just yet. The most realistic scenario remains a wide, elevated range — $3,000 to $3,600 — until a clear, powerful catalyst emerges.
15.08.2025
When Yields Fall: Three Temptations and One Alternative
High yields are dangerously addictive. Not so long ago, the bond market offered 25% on solid names. Today, it’s more like 15–17% — and in some corners, less. The first instinct is to get back what was lost. And that’s when the temptations begin.
1️⃣ Chasing Yield Through Credit Risk
The most obvious move: reach for higher-yielding, lower-quality bonds. Welcome to the slightly spooky world of high-yield debt. BB-rated issues may still pay 25–30% annually, B-rated — even more. But that extra return comes at a price: credit risk.
So far, there’s no default avalanche, and many issuers are paying on time. But another trap lurks: the VDO (high-yield) market is shallow. When demand spikes, yields can collapse fast, leaving you with a risk premium that no longer compensates for the risk itself.
2️⃣ The Mirage of Amortizing Bonds
See a mysteriously high yield in your screener? Check for amortization. These bonds repay principal gradually, which means you’ll have to reinvest chunks of cash at lower rates as the cycle goes on.
Their stability and declining credit risk can be useful — but in a fast-falling rate environment, they often underdeliver compared to the headline yield.
3️⃣ Betting on Devaluation
Quasi-FX bonds are another seductive path. The story sounds neat: if the ruble drops, currency revaluation will make up for the lower coupon. But timing and magnitude are unknowable.
Devaluation isn’t guaranteed — and even if it happens, the pace might not beat the returns on plain-vanilla ruble bonds.
✅ The Alternative: Arithmetic
Let’s do the math. At the end of last year, nominal yields around 25% minus 19% inflation gave you a real pre-tax return of roughly 6%.
Today, with 15% yields and inflation near 7%, your real return is closer to 8% — higher than in the “glory days” of nominal highs. So why chase the ghosts of double-digit coupons at the cost of real risk?
A steadier approach may serve you better: keep the core in reliable bonds, and add “exotics” in small, well-justified doses.
Investing isn’t a sprint. It’s a long trek. Victory belongs not to the fastest runner — but to the one who still has strength left at the summit.