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Fundamental risks of HPE industries in 2021

Although company-specific risks in high-yield bonds outweigh those common to any given industry, it is helpful to have a higher level of risk perspective. This material summarizes the main parameters that may affect the profitability of the industries in which the main issuers of PRObonds portfolios operate – agriculture, leasing, construction and development, MFOs, IT infrastructure and retail.

Five qualitative parameters were assessed as potential risks: macroeconomics (the degree of cyclicality in relation to the current realities of the Russian economy), market sentiment (the view of experts and the market on the development of the industry), supply and demand risks, as well as regulatory risk, which is especially relevant this year.

Drawing conclusions from the general picture of the study, each industry has its own set of risk factors. The aggregate risk is intuitively less in industries where the market developed more organically in the pre-crisis period and was able to confirm its resources for recovery during 2020 – in the IT business and leasing. In a number of industries, one of the five considered risk factors increases the uncertainty in the industry this year: in this case, we are talking about the regulatory risk in agriculture, as well as the factor of demand stability in retail and MFOs.

Considering industry risks does not automatically mean that companies operating in the markets become more prone to such risks. The most pressing risks can be managed, and, as we can see, a number of issuers manage to do this.

Research link

Author: Ilya Grigoriev


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