Stock market’s collapse hits share price-related tools, Metcombank says

8 October 2008 (08:35)

‘The stock market’s collapse primarily hit the stock price-sensitive investment tools,’ METCOMBANK’s CFO Vadim Bambozov said to an UrBC reporter.

‘Given the fact that the inflation rate reached 9.7% on September 1, 2008, some 89% of the country’s unit investment trusts turned out to be loss-making. Some of them experienced the non-profitability of as much as 50%. To make matters worse, people are less interested in investing in trusts now because of the real estate market’s unpredictability and the difficulties of getting there. Investing in precious metals is losing popularity as well because it does not yield very much profit. All things considered, experts believe banking deposits are the safest and most reliable way of keeping one’s money and making it bring you profit. Nothing can beat them in terms of risk: firstly, the interest rate on a deposit remains the same throughout the entire deposit period, regardless of the market’s fluctuations. Secondly, the obligatory deposit insurance system means you get your money back no matter what. Finally, the deposits’ profitability has already proved to be greater than that of many other investment targets,’ he explained.

‘Moreover, the banks have been paying more attention to this segment lately, so they keep coming up with new, interesting products. My advice to those thinking of a long-term bank deposit, however, is to consider not only the terms offered but also the bank’s experience and resistance to extraneous factors,’ Bambozov added.

Other materials on the topic::