In global financial market, February was not full of events that might considerably influence the investors’ mood. The only fact that aroused some interest was inaugural speech of the new head of FRS Janet Yellen before the US Congress, in which she confirmed adherence to policy of Ben Bernanke, also drawing special attention to unemployment level in the USA.

This in turn provided grounds for the market to believe that the FRS will continue keeping key interest rates at record-low levels during long term.

Macroeconomic data varied, having little accent on decreasing growth pace in the world’s largest economies – the USA and China. However, many analysts attribute weak US data at the beginning of the year to exceptionally cold weather, thus expecting data improvement in the middle term.

The situation in Kiev also did not have huge impact on the global stock market, except Russian currency and stock market.

Eventually, as we expected, correction in the global stock market in January was a short-term one, and at the beginning of February the market resumed growth. The market of emerging countries continued to lag behind. While markets of most developed countries at least recovered their losses of the previous month, the markets of emerging countries were able to retrieve only a half.

We keep being positive about global stock market in the middle term, but considering the overall developments in the market since the beginning of the year and given the sharpening geopolitical situation we anticipate increased volatility in the short term. Therefore, at the end of February, having achieved target levels due to fast and strong growth, the stock fund manager decided to take profit under some positions, since growth potential from current level seems to be limited, and we consider the correction risk in the given situation to be high. Further decisions about restoring closed positions or correcting the funds’ portfolio structures will be taken in accordance with the market developments.

Positive trend also prevailed in the global bond market. The prices of both government bonds of emerging markets and corporate bonds have considerably increased due to lowering risk premium (credit spread) and stabilization of prices in the market of the US and German government bonds. In February, a bill on raising the US debt ceiling till March 2015 was adopted, which means the problem of the US debt ceiling is removed from the agenda at least for a year. The absence of the risk of occurrence of another budget crisis in the USA in the middle term is a positive factor, which might facilitate growth of risky assets in 2014.

The bonds denominated in euro also continued to demonstrate impressive price growth. This segment is greatly demanded by investors, since, unlike the USA, the eurozone regulatory authorities do not rule out the possibility of enhancing the monetary policy stimulation, given low inflation expectations.

The market of CIS bonds demonstrated weak dynamics due to political crisis in Ukraine, devaluation in Kazakhstan, and also investors’ concerns about possible negative impact on Russian banks because of their investments in Ukrainian debt instruments.

The fund managers continue to keep to moderately conservative strategy, preferring bonds with high coupon yield and relatively low duration, since those are less sensitive to negative mood in the markets.