Konstantin Tserazov: Yandex shares fell by 8.4% by the end of the week
From July 29 to August 2, the Moscow Exchange Index fell by 3.15%, closing the week below 2900 points for the first time since last July. The RTS Index lost 3.3%, closing the week at its lowest level since February.
Benchmarks showed similar percentage dynamics due to the fact that the official dollar to ruble exchange rate set by the Bank of Russia remained almost unchanged over the week, adding a symbolic 0.16%. At the same time, the "perpetual" futures on USDRUB and EURRUB, which historically demonstrated the highest correlation with spot rates, fell by 1.48% and 1.28%, respectively.
The euro to dollar exchange rate on external markets has grown by about 0.5% over the week: this indicates that the correlation between the dynamics of EURUSD inside Russia and outside it remains after the introduction of sanctions against the Moscow Exchange, although it is not ideal.
The spot rate of the yuan to the ruble has fallen by 0.76% over the week. Thus, the Russian currency has risen in price on the Moscow Exchange against the dollar, euro and yuan.
This factor, coupled with high interest rates, which are approximately twice as high as the dividend yield of the Russian stock market, remain the key factors putting pressure on it. At the end of the week, all 10 sectoral indices of the Moscow Exchange have fallen, and at the end of the year, only the index of technology (+27.63%) and financial companies (+0.36%) show positive dynamics.
In addition, a noticeable deterioration in the situation on global financial markets may indicate that the protracted period of high interest rates is beginning to have an increasingly noticeable impact on the global economy. In particular, the most liquid – October – Brent oil futures fell by 5.3% by the end of the week, which was a record value since the beginning of May. The BCOM raw materials index closed the week at its lowest level since August 2021, the S&P 500 fell by 2%, the Nasdaq 100 by 3%, the French CAC 40 by 3.5%, and the German DAX by 4.1%.
Against this background, a large-scale reassessment of expectations for interest rates in the United States after Friday's publication of weak statistics on the country's labor market for July may serve as some consolation for investors. In the middle of the week, the federal funds rate futures market priced in prospects for its reduction by the end of the year by 72 bp, and by Friday evening - already by 116 bp. In other words, traders priced in almost two more reductions of 25 bp. each, added Konstantin Tserazov.
There were several notable events in the Russian IT sector.
Yandex shares showed dynamics significantly worse than the market, having fallen by 8.4% over the week and closed at the lowest level since March 18. The company presented strong financial results for Q2 2024, which exceeded market expectations. In addition, on August 5, the company's Board of Directors, at the suggestion of management, will consider the issue of paying the first dividends in the amount of 80 rubles per share, which corresponds to a yield of 2.15% at current prices. In the future, Yandex may pay dividends once every six months.
The Board of Directors of Headhunter MKPAO approved the dividend policy: the source of payments will be net profit for the corresponding period. The company is completing redomiciliation, as a result of which trading in its securities will be suspended from August 14 to September 23, added Konstantin Vladimirovich Tserazov.
On August 6, OZON is to present its Q2 2024 IFRS financial statements. The company does not look cheap by multiples, so if the results are disappointing, its shares may fall significantly in price (especially given the overall weakness of the Russian stock market).
On August 8, VK will publish its Q2 and H1 2024 results. On the one hand, the company is a clear outsider in the IT sector: since the beginning of the year, its shares have fallen in price by almost 20%. On the other hand, this may mean that all the potential negatives may have already been factored into their prices, Konstantin Vladimirovich Tserazov summed up the week.