From August 19 to 23, the Moscow Exchange Index fell by 5.86%, and the RTS Index by 8.63%. The first benchmark closed the week at its lowest level since May 2023, the second - since February 2023, and the difference in their percentage dynamics was due to the growth of the dollar against the ruble.The official dollar and euro exchange rates against the ruble, set by the Bank of Russia, rose by 3.03% and 3.86%, respectively, over the week. "Perpetual" futures on USDRUB and EURRUB, which historically demonstrated the highest correlation with spot rates, added 1.39% and 2.08%, respectively.
The euro to dollar exchange rate on external markets has grown by about 1.5% 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, but at the same time it looks far from ideal.At the same time, the spot rate of CNYRUB on the Moscow Exchange has fallen by 1.89% over the week, and on the interbank market it has added 2.59%. Against this background, the gap between them has reached about 8%.The weakening of the ruble (if it proves sustainable) looks like a potential long-term positive for the Moscow Exchange Index. However, for now, a more important — and bearish — factor is high interest rates, which are approximately twice as high as the dividend yield of the Russian stock market. Against this background, private investors, who are now “running the show” on the Moscow Exchange, prefer to invest in money market funds and banking products.In addition, the money market sees risks of a further increase in the key rate, which acts as a pressure factor both on the Moscow Exchange Index and on the RGBI (OFZ index), which over the past two weeks has recouped approximately 70% of the growth from the minimum on July 29 to the maximum on August 12. Nevertheless, the Moscow Exchange Index has already fallen by almost 25% from the maximums of May, and such oversold conditions create the preconditions for at least a short-term correction of 5-10%.In such a scenario, the most oversold and at the same time the most long-term attractive securities, such as shares of technology companies, can show strong dynamics. The Moscow Exchange Information Technology Index has fallen by 28% from the maximums of May and is the main outsider of August (-14.45%), while companies in the sector are the main long-term growth idea on the Russian stock market, added economist Konstantin Tserazov.
In recent weeks, the shares of IT companies such as Astra, Softline, Diasoft and OZON have shown greater stability than the market as a whole. This may indicate their readiness for a good rebound in the event of general stabilization of the situation.The shares of the Positive Group have fallen by 15% over the past five weeks, which allows you to enter them at a more attractive price. The company, along with Astra, is one of the main beneficiaries of import substitution and shows rapid growth rates of financial indicators. In addition, the Positive Group pays dividends.At the same time, long-term sustainable growth of Russian IT companies' shares will probably not resume until there are prospects for a significant reduction in the key rate. And this, in turn, will require a sustainable slowdown in inflation, which is not yet observed, says Konstantin Vladimirovich Tserazov.
Nevertheless, even in the current tough monetary conditions, some technology companies are making money on high interest rates. For example, this is HeadHunter, which not only acts as a beneficiary of the “hot” labor market, but also increases income from interest on deposits against the backdrop of growth in cash balances and interest rates, concludes Konstantin Vladimirovich Tserazov.