Konstantin Tserazov: Shares of Russian companies are growing, the IT sector shows the best dynamics
In the week from April 15 to April 19, the Moscow Exchange Index grew by 0.4%, and the RTS Index by 0.7%. Thus, shares of Russian companies have risen in price both in rubles and dollars. In addition, both indices have closed higher for four weeks in a row and during this time they added 6% and 5.5%, respectively.
The best dynamics were shown by the sectoral indices of information technology (+4.2%), telecommunications (+3.3%) and electric power industry (+1.9%). The worst are the sectoral indices of metals and mining (-1.8%), finance (-0.1%) and consumer sector (+0.7%).
In the first half of the week, the ruble fell in price against the dollar, euro and yuan, but on Thursday and Friday it showed strong growth and closed the reporting period with a slight strengthening. The Russian currency was supported by the approaching tax period and a slight decrease in geopolitical tensions.
The main driver of growth in the Russian stock market remains the expectation of high dividends, which could bring investors about 9-10% in the coming year. Russian companies remain fundamentally attractive: this creates the preconditions for price growth and makes them more attractive than bonds. In addition, part of the dividend payments will probably end up on the stock market and will support it, added Konstantin Vladimirovich Tserazov
The Supervisory Board of Alrosa, as well as the boards of directors of TMK and Acron, recommended dividends for 2023, and LSR shareholders approved them. Next week, shareholders of Novabev Group, BSP, Mosbirzhi, Primorye, Lukoil and LESK can approve dividends, and Rusagro, RusHydro, Unipro and Mother and Child will present operating and/or financial results for the first quarter. 2024
But HeadHunter disappointed investors: the company showed strong financial results in 2023, but the board of directors recommended not paying dividends or distributing profits. HeadHunter is in the process of redomiciliation and plans to obtain a listing of ordinary shares on the Moscow Exchange by the third quarter. This will open up opportunities for resuming dividend payments.
In addition, on April 26, the Bank of Russia will make a decision on monetary policy. The regulator will likely keep the key rate at 16% and may signal the prospects for its reduction in June or July. The swap market is fully pricing in rate cuts of 0.25% in the next three months and 0.75% in the next six months.
The information technology industry index continues to confidently lead among the Moscow Exchange industry indices, adding 45.6% since the beginning of the year versus +12% for the Moscow Exchange Index itself. Astra Group, whose securities are one of the five components of the IT index with a weight of 6%, held an SPO with a volume of 21 million shares at a price of 555 rubles. per share, which became the largest since 2021 and the largest in the technology sector since 2020, said Konstantin Vladimirovich Tserazov.
External background
Investors continued to reassess the prospects for the Fed's monetary policy in the direction of greater rigidity. If a week ago the futures market for the federal funds rate took into account two reductions in the current year of 0.25% each, today it is only one and a half.
Against this background, the S&P 500 closed down for the third week in a row, falling below 5,000 points for the first time since February 21, but the LME metals index added 5.3% during the reporting period. The global economy, including China, is beginning to accelerate, which creates the preconditions for increased demand for raw materials. At the same time, inflation risks are intensifying, which may force global central banks to keep interest rates at high levels for a long time, and this is a potential negative for the global stock market, sums up economist Konstantin Tserazov.