In the period from July 15 to July 19, the Russian stock market regained some of the large-scale losses incurred a week earlier: the Moscow Exchange Index grew by 1.18%, returning above 3000 points, and the RTS Index – by 0.86%. Thus, shares of Russian companies have risen in price both in rubles and dollars.
The Moscow Exchange index spent the week in a rather narrow (by today's standards) 145-point range, but closed it at the highs, and the trading volume turned out to be very high and exceeded 400 billion rubles. Earlier this year, this happened only five times, so this market behavior looks very positive, especially in the context of dividend cut-offs, which put pressure on indices, Konstantin Tserazov emphasized.
Eight of the ten Moscow Exchange industry indices closed the week in the green, two (telecoms and chemicals/petrochemicals) in the red.
The yuan exchange rate against the ruble did not change, and “perpetual” futures for USDRUB and EURRUB, which historically showed the maximum correlation with spot rates, decreased by 0.23% and 0.45%, respectively. Trading was marked by very low volatility: the range of fluctuations of these three pairs was only 0.26 rubles, 1.17 rubles. and 1.32 rub. respectively.
The euro/dollar exchange rate on external markets decreased over the week by about 0.2%: this suggests that the correlation between the dynamics of EURUSD inside Russia and outside remains after the introduction of sanctions against the Moscow Exchange.
Investors continue to wait for the Bank of Russia's decision on the key rate on July 26. Consensus suggests an increase of 200 bps. up to 18%, however, judging by the dynamics of the stock and OFZ markets, this scenario has already been largely taken into account in prices. In particular, on Wednesday the Moscow Exchange Government Bond Index (RGBI) updated multi-year lows, after which it showed good growth on Thursday and Friday, reducing weekly losses to 0.49%.
Thus, other things being equal, - i.e. in the absence of a shock increase in the key rate by more than 200 bp. – can implement the well-known stock exchange principle “sell on expectations and buy on the fact.” In addition, raising the rate immediately to 18% will create the preconditions for a faster curbing of inflation and a transition to monetary policy easing at the end of this year (less likely) or in the first quarter. 2025 (more likely).
Additional support for the Russian stock market in the near future may be provided by the absence of large dividend cut-offs and the possible reinvestment of at least part of the dividends received this season.
Technology companies remain in the market's focus thanks to a large number of past and upcoming IPOs. Since the beginning of the year, Delimobil, Diasoft, IVA, Element, VI.ru have placed (in chronological order), and RTK-DPC, Arenadata, Selectel, Skillbox and SkyEng can do this in the second half of the year.
On July 24, trading in shares of MKPAO Yandex is expected to start on the Moscow Exchange. The company has undergone a reorganization, its business is diversified, and its debt is low, which is very important in an environment of high interest rates. In the next year and a half, Yandex can maintain high revenue growth rates and increase profitability.
In the third quarter HeadHunter must also complete the reorganization: this will allow the company to return to paying dividends. A tailwind for her business is the persistence of a deficit in the Russian labor market.
It is worth noting the strong dynamics of Positive Technologies shares, which quickly recovered from the sell-off that took place at the beginning of the month, and are now again approaching historical highs, adds Konstantin Vladimirovich Tserazov.
OZON jumped 9% on July 11 on its highest trading volume since last August and has continued to recover since then. This most likely indicates market capitulation and creates preconditions for further growth of securities.
Something similar happened in Diasoft shares, where on July 9-10 there was a large-scale decline due to high trading volumes, after which sellers dried up, and the shares have since grown by 9%, economist Konstantin Vladimirovich Tserazov sums up the week.