Vladislav Kochetkov, FINAM: ''If you want cryptocurrency, it is better to start with bitcoin''
The cleanup of the banking sector is a correct policy of the Central Bank. We should get ready for new cuts in the insurance market, as well as another reduction in the key rate. The situation with Tatfondbank depositors is very similar to fraud. And attempts to predict the exchange rate is inferior to crystall-ball gazing. It is a brief summary of the online conference of Realnoe Vrmeya with president-chairman of the board of investment holding FINAM Vladislav Kochetkov. Read the details in our material.
About the crisis: we have reached the bottom, but…
In February 2015 at the first business forum of Realnoe Vremya, Vladislav Kochetkov stated that the current crisis would be the longest in the history of Russia and would last from 3 to 7 years. On 13 October 2017, the head of FINAM stated that he was not mistaken in his forecasts:
''We are in a crisis, a deep crisis. People even ceased to call it a crisis and started calling it ''the new economic reality''. From the pros: probably, we have reached the bottom. We still cannot bottom out. There are no prerequisites for a further decline, as well as the preconditions for reviving. Therefore, the forecast about 5-7 years is probably too optimistic,'' noted Kochetkov.
According to him, all the positive changes in the economy are so little that in general they do not affect the structure. We have accustomed to the sanctions, but they do put pressure on the economy.
From the pros: probably, we have reached the bottom. We still cannot bottom out. There are no prerequisites for a further decline, as well as the preconditions for reviving
Slow recovery may begin next year
''We will not soar but slowly start to get out of the crisis. In five years we will live better and happier, but the next two to three years will remain difficult,'' Kochetkov made a forecast. ''Our economy remains the same as it was. It just has become smaller because oil has become cheaper.''
About embezzlement of the state funds: they perform their function
The state funds were created in order to spend them at the right time. So that they fulfill their natural destiny, Kochetkov noted. Yes, right now money almost do not go to the funds, but in the current economic situation the funds can be saved. They can be replenished even with a slow recovery of the economy, so they will be enough for a long time.
''When the reserve fund is exhausted, they will have to take some measures at the expense of cuts in budget expenditures. But the situation when the airbag is reduced and may be close to exhaustion should spur officials to carry out the very structural adjustments that still do not exist,'' said Kochetkov.
There are already almost no banks in Russia that violate. They rather deal with the banks that conduct a risky credit policy
About banks: the Central Bank is doing everything right
According to president-chairman of the board of FINAM, the Central Bank is conducting the policy of consolidation. In the result, the risks of the banking system will decrease.
''There are already almost no banks in Russia that violate. They rather deal with the banks that conduct a risky credit policy. This wording, most likely, conceals the fact that they take money from the population and give it to its shareholders, who spend it on their projects. They rarely funnel out, they rather spend with varying degrees of effectiveness, which creates risks for investors,'' explained the situation Kochetkov.
He predicts that after this cleanup there will be about 200-300 banks. They will conduct a more prudent and balanced policy. Notably, 95% of them will be private, mostly — niche ones (settlement, mortgage, etc.). Universal banks will be less, about 30-50, and state ones — about 10.
About regional banks: useful institute for region
In the opinion of the guest of the edition, regional banks are necessary for the system. They better feel the situation in the region, specifics of development. The ordinary citizen is not interested in geography of origin, but it can important for businesses.
''Regional banks [after cleanup and consolidation] may remain. Their number will be less. Most likely, many will receive the status of quasi-state, the subject of the federation begin to participate in their capital. It will promote participation in some regional projects. But the capital structure will change, and their number will also be reduced,'' said Kochetkov.
I was told by economic journalists already in early August that the order on reorganization of Binbank had already been signed. I have reasons to trust this information
About Binbank: The Central bank understood everything but hoped for better
In the opinion of the guest, one should not think that the Central Bank knew nothing.
''Banks are a specific thing. Bank can long and successfully work with zero and even negative equity. As I understand it, the CB had a long dialogue with the owners of the banks. I was told by economic journalists already in early August that the order on reorganization of Binbank had already been signed. I have reasons to trust this information.''
The controller saw that the owners of the group Bin were trying to save the bank. Therefore, the Central Bank waited until the last moment, looked at the actions of the shareholders and, when it realized that nothing would happen, assigned reorganization.
''The Central Bank sees if not everything then much,'' said Kochetkov.
About Tatfondbank: it smells like fraud
Rumours has it that one of the problems with Tatfondbank was the translation of investors into investment funds. Kochetkov noted on this that in the case with Tatfondbank there was incorrect practice, when financially illiterate clients were offered strategies for financial management under the guise of deposits.
''The court is to decide it, but it looks like a scam,'' said the guest of the edition.
Kochetkov advised the population to consider carefully the product they are offered. They should at least to ask the managers how things work. The situation with Tatfondbank will motivate people to understand these issues.
About the rate of the Central Bank: a new reduction is expected
According to FINAM president's forecast, by the end of the year the Central Bank will lower the key rate by 0,5 at least once. Next year, it is possible two or three reductions — the inflation rate contributes.
The shift in the Central Bank rate directly affects the rates on deposits and loans. But loans are also not really affordable, ''Banks prefer to sit on money and not to give them.''
The key rate also affects the exchange rate: progressively as the rates of the fed and the Central Bank equalize, it becomes unprofitable to invest in OFS for foreign funds. That is why they sell the ruble, buy the dollar — and the dollar goes home. So the ruble will become cheaper.
About oil: OPEC is not the same as it used to be
The decision of OPEC to cut oil production do not affect substantially anything. The market has already been rebuilt. Now shale oil plays the big role. The development of alternative energy also puts pressure on the market.
The bubble that it is being created here will drastically shrink. The market on the accumulated basis will start to grow from scratch, slower but more regulated. And everyone will come to crowd investing based on blockchain technology
About the rate of fiat currency: difficult to predict
Vladislav Kochetkov noticed that trying to predict the ruble is a thankless task. Even the forecasts of the ministry of economic development and the Central Bank are not proved right. But one can try to guess based on purely personal feelings of the president of FINAM that by the end of the year the dollar will cost 59-60 rubles.
As for the euro, this currency will feel better than the dollar. Although much will depend on the situation in Spain.
About cryptocurrency: the bubble is about to shrink
Vladislav Kochetkov made a forecast for the market of cryptocurrencies. In his opinion, in the coming year, 90-99% of the companies that launched ICO will just collapse.
''The bubble that it is being created here will drastically shrink. The market on the accumulated basis will start to grow from scratch, slower but more regulated. And everyone will come to crowd investing based on blockchain technology,'' Kochetkov believes.
As for bitcoin, it is one of the most sturdy and ''least bubbly'' cryptocurrency. The disadvantage is high volatility and overheatedness due to the hype around.
''If you want cryptocurrency it is better to start with it,'' says Kochetkov.
Those people switch to cryptocurrency who are prone to gambling and investments with increased risk. 10% of the portfolio can be invested, but it is better not to put all bets on it, added the guest of the edition.