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Russian Expert Sees Developing Markets among those Most Affected by Crisis in US Mortgage Securities Market

Business Materials 8 August 2007 18:38 (UTC +04:00)

Baku, Azerbaijan / Тrend corr A. Badalova / Developing markets can be referred to as those most affected by the crisis in the US mortgage securities market, according to an analyst of the Russian 'Anton' investment company, Vladimir Osakovski. "The crisis in the US mortgage securities market may lead to a large overestimation of risks on all varieties of securities, and that may lead to 'striving for quality' and flow of capital from assets with high risk into securities with low but guaranteed profitability," Osakovski said. High risk securities, besides US mortgage bonds, include all varieties of securities in developing markets. According to the analyst, a mass flow of capital from developing markets to the Unites States resulted in a dramatic increase in value of securities of the developing markets.

As for the European Union, the expert believes it probably should be referred to as the wining side. "The construction sector of the US is not significant to the European economy. In the case of mass striving for quality, profitability of public securities of the leading European countries decreases and that causes a decrease in interest rates in the consumer market thus stimulating consumer demand," Osakovski said.

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