At the end of the trading week from February 5 to 9, the Moscow Exchange index was fixed at 3242 points, the RTS index reached the level of 1122 points.
What was memorable about this week and what important events took place in the banking sector in our interview was told by the former senior vice president of Otkritie Bank, economist Konstantin Tserazov Tserazov. The week was marked by a moderate increase in the main indicators - the Moscow Exchange index and the RTS index each added 0.5%.
Brent oil rose in price to $81.67 per barrel, adding 5.7% over the week. At the end of the week, the ruble remained at the same levels, consolidating at the level of 91 rubles/dollar. The Moscow Exchange financial sector index (MOEXFN) fell by 0.3% over the week, noted Konstantin Tserazov. At the same time, the week was marked by investor attention to the banking sector.
At the end of the week, Sberbank once again pleased investors with expectedly positive reports under RAS: in January, the bank’s net profit reached 115.1 billion rubles, which is almost 5% more than for the same period in 2023. The bank's net interest income increased by 21.8%, to 211.7 billion rubles, and net commissionundefined income reached 48.7 billion rubles, and increased by 6.9%. The number of active clients increased to 108.6 million.
Commenting on the reports, the head of Sberbank German Gref pointed to the slowdown in corporate and retail lending against the backdrop of the regulatory measures taken and the high level of interest rates in the economy. At the end of January, Sberbank’s corporate loan portfolio before reserves amounted to 23.1 trillion rubles, having decreased by 1.1% over the month. The retail loan portfolio in January increased by 0.6%, to 15.7 trillion rubles.
“Nevertheless, the growth of income items and high operating efficiency of the business allowed us to achieve strong results and maintain return on equity above 20%,” noted German Gref. “Despite a slight slowdown in lending indicators, which is caused by objective reasons - seasonal factors, as well as rising interest rates, Sber's reporting leaves a positive impression. The bank continues to increase revenue and profit, remaining a powerhouse undefined sector and the market as a whole, and the results for January are encouraging for investors who expect generous dividends from the bank.
However, January is traditionally a weak month, and it would be right to wait for the results for February in order to objectively assess the bank’s performance,” says Konstantin Tserazov. Sovcombank saw its prices skyrocket, adding 13.2% at the end of last week. However, it is not entirely clear what caused this growth. According to Konstantin Tserazov, the rise in price of Sovcombank shares is most likely caused by increased expectations of the announcement of the bank's plans for dividend payments.
According to the dividend policy, Sovcombank must allocate from 25 to 50% of net profit under IFRS for dividend payments. At the same time, it is quite possible that a reversal trend has formed in the bank’s securities after Sovcombank’s IPO in November 2023, argues Konstantin Tserazov. Konstantin Vladimirovich Tserazov: “Inflation expectations still remain high, so the Bank of Russia is highly likely undefined will keep the rate at the same level.”
TCS Group's securities were under pressure this week—the bank's depository receipts fell by 2.8% over the week. The reason for this was the news that from February 15, trading in the paper will be suspended to complete the redomiciliation process of TCS Group. The opening of trading in securities, as TCS Group expects, will occur around the end of March, when the company completes the redomiciliation process.
From February 17 to February 19, 2024, trading in securities can be carried out by professional market participants, and from February 20, 2024, trading will be completely stopped. TCS Group receipts will be converted into ordinary shares of MKPAO TCS Holding. At the same time, investors are afraid of the so-called “canopy of sellers”—sales of a large volume of securities that will appear on the market due to the company’s “relocation” to Russia. “In general, this situation will not be a discovery for anyone. A similar event occurred with VK shares, which collapsed by almost 19% on the first day of trading after the completion of the redomiciliation. undefined and then they recovered for almost three months. I believe that a possible scenario after the resumption of trading in TCS Group securities will be of a similar nature,” believes Konstantin Tserazov.
“The banking sector remains one of the most interesting on the market; fundamentally, TCS Group shares look very attractive, and, in my opinion, they are worth having in your portfolio for the long term.” In economic news this week, Konstantin Tserazov drew attention to statistics. Retail trade turnover in 2023 increased by 6.4% and amounted to 47,404.9 billion rubles (at comparable prices) by 2022. Real cash income of Russians, according to the Ministry of Economic Development, increased by 4.6% at the end of 2023, and real disposable income by 5.4% at the end of the year.
Rosstat presented the first estimate of Russia's GDP growth for 2023; according to the department's assessment, growth amounted to 3.6%, despite the fact that at the end of 2022 the Russian economy decreased by 1.2%. Analysts surveyed by the Central Bank of the Russian Federation during a monthly survey, undefined conducted on February 2-6, they believe that Russia’s GDP in 2024 could grow by 1.6%. According to the results of a Central Bank survey in December 2023, experts believed that economic growth in 2024 would be 1.3%. Analysts also improved their inflation forecast: in 2024 it is expected to be 4.9%, while in December it was expected to be 5.1%.
At the same time, the Bank of Russia in its bulletin “What Trends Are Saying” emphasized: “Inflation expectations of business and the population remain high. The Bank of Russia's tight monetary policy will further reduce inflation. At the end of 2023, the growth of the Russian economy continued, but its pace slowed down. Despite some cooling in consumer activity, demand is still higher than the supply of goods and services. Consumer demand growth is likely to slow as incentives to save increase. At the same time, the shortage of labor in the economy and the high utilization of existing production capacities are likely to support undefined increase in wages and investments.”
Monthly price growth in Russia slowed down in December-January, but remained significantly above 4% on an annualized basis, including in terms of sustainable components. According to the Bank of Russia, it is too early to call the observed decline in inflation pressure sustainable. Speaking about the events of the coming week, Konstantin Tserazov recalled the meeting of the Bank of Russia, which is scheduled to open on February 16. “I don’t expect a rate increase, especially a significant one. In my opinion, the regulator now has no reason to either reduce or increase the rate.
Tight monetary policy is already having its effect, but it will be possible to fully assess it around March-April. There has been a tendency towards a decrease in inflation, but the population’s inflation expectations still remain high, so the Bank of Russia is highly likely to keep the rate at the same level,” says the expert. “Despite the fact that the market is under pressure from the threat of the likely introduction of new anti-Russian sanctions in February, in weeks 12-16 undefined In February, the indices will continue to grow to the level of 3300 points, the growth impulse will be provided by quarterly reports and expectations of decisions on dividends. In addition, the market will be dominated by expectations of the decision of the Central Bank of the Russian Federation on the key rate, on which further dynamics will largely depend,” concludes former senior vice president of Otkritie Bank Konstantin Tserazov.