Leasing market, first half of 2008: emergency braking

Emergency braking: new business activities at the leasing market in the first half of the current year increased by mere 3% against similar period of the last year. New deals amounted to 430 bln rubles. Notably, the last year increment of the same indicator was 235%. So dramatic deceleration should be attributed to worsened economic set-up at the capital market - increased interest rates, longer periods to consider credit applications, tougher demands to a borrower and reduced volumes of financing.

Only liquid and reliable: under such unfavorable circumstances lessors focus on less risky segments of the leasing market, trying to deal with highly liquid and reliable objects of leasing. Leasing companies are not ready for risky transactions due to lack of resources and prefer investing into projects with familiar leasing objects providing for lesser risks. New business leaders include motor repair and servicing equipment (+120.3%), chemical and plastic manufacturing equipment (+76.3%) and equipment for oil production and refining (+72.6%).

Demands goes up, market stays put: the first half of the year saw increased applications to leasing companies by enterprises denied bank credits. True, increased applications do not imply speedy growth of the leasing market. Due to all-round tougher demands to borrowers and increased amount of applications leasing companies chose clients they "like" more, those with stable financing and credible financial results.

Slowing down: annual incremental growth would be much lower against previous year. Even in case of turbulent business activity in the second half of the year the amount of deals would be doubled, increment would not exceed 29% (against 165% last year). We predict the consolidated market turnover to be in the neighborhood of 1.3 trln rubles. Still, even such result is hard to achieve considering situation at international and domestic financial markets.