Konstantin Vladimirovich Tserazov: «The market maintains a medium-term upward trend»

The past trading week from February 26 to March 1 was marked by optimism, with market participants actively winning back losses incurred in February. What was happening in the IT sector, how our high-tech companies spent the week — the former senior vice president of Otkritie Bank, economist Konstantin Tserazov, told us in our interview.

In the trading week from February 26 to March 1, the Moscow Exchange index grew by 4%, to 3266.66 points, the RTS index soared by 5.4% and reached 1122.32 points. The Moscow Exchange Information Technology Industry Index grew by 2.5%. The positivity on the market was due, first of all, to the reduction in the threat of sanctions — fears that NCC would fall under sanctions did not come true. At the same time, investors were supported by the message of Russian President V. Putin to the Federal Assembly, at which the head of state outlined the vectors of economic development of the country. Rising oil also played a role — over the week, a barrel of Brent rose by 2.6%, to $83.82%, says Konstantin Tserazov. The national currency strengthened, winning back 1.16 rubles from the dollar over the week and reaching 91.69 rubles/dollar.

So, Western sanctions pressure turned out to be moderate. The US and EU introduced new sanctions aimed at restrictions against the Russian military-industrial complex, however, the market took these restrictions calmly. On Monday, the market, supported by the absence of sanctions against NCC, began to win back the losses of the previous week. The Moscow Exchange index soared above 3,210 points on the first day of the trading week; Yandex shares looked the best, growing by 5%. During the day, the Moscow Exchange index added 2.14%, and the RTS dollar index, against the background of the strengthening of the ruble, grew by 3.1%.

On Tuesday, the market moved to consolidation around 3210 points. The growth leader was Rostelecom, which presented IFRS reports for the fourth quarter of 2023 and the entire year 2023. Revenue in the fourth quarter increased in annual terms by 9% to 209.3 billion rubles, and for 2023 revenue reached 707.8 billion rubles, an increase of 13% over the year. Net profit increased by 20% in 2023, reaching 42.33 billion rubles, however, in the fourth quarter the figure decreased in annual terms by 52%. The company, according to management, intends to increase revenue to 1 trillion rubles, but has not yet announced the time frame for achieving this result. The company’s dividend policy involves paying dividends of at least 50% of net profit under IFRS and at least 5 rubles. per share, recalled Konstantin Tserazov. Based on this, Rostelecom can pay at least 6.3 rubles for 2023. per ordinary and preferred share, the expert predicts. In addition, Rostelecom intends to list the securities of one of its subsidiaries on the stock exchange in the second half of 2024. As the market believes, this placement could be an offer of shares in the Wink video service. On this news, Rostelecom’s shares rose by 2.5% during the day, and over the week, Rostelecom’s preferred shares rose by 10.9%.

Another event for the Russian IT sector could be the placement of securities of the Skillbox educational platform, which is owned by VK. According to media reports, the company has again returned to the idea of holding an IPO, but is in no hurry to open specific terms for the placement. According to VK reporting, for the nine months of 2023, the educational segment of the VK holding showed revenue growth by 38% compared to the same period in 2022, to 11.1 billion rubles. At the same time, the segment also demonstrated a steady increase in the number of registered clients — by 17%, to 14 million people. Analysts estimate the company at the level of 30-50 billion rubles; of course, this placement will attract the attention of investors, since a fast-growing company can become the first issuer in the edtech field and take leadership in the industry, believes Konstantin Tserazov. However, it is possible that Skillbox will be ahead of its competitor in entering the market — last year the media reported the Skyeng group’s intention to enter the stock exchange in the first half of 2014.

Konstantin Vladimirovich Tserazov: «Of course, Yandex will become one of the beneficiaries of new measures to support the IT sector. The company is already a leader in the implementation of digital services and generative artificial intelligence, and its products are highly likely to become one of the foundations for the implementation of the national project.»

In the middle of the week, the IT sector was given a powerful impetus by the speech of Russian President V. Putin with a message to the Federal Assembly. Investors were inspired by the economic component of the President’s message, says Konstantin Tserazov. According to the head of state, the capitalization of the Russian stock market by 2030 should double compared to the current level and amount to 66% of GDP. The President also proposed extending the income tax benefit to Russian companies purchasing domestic high-tech equipment. «Starting this year, Russian companies can reduce their income tax payments if they purchase advanced domestic IT solutions and products using artificial intelligence,» said V. Putin. Company expenses will be taken into account with an increased coefficient, one and a half times more than actual costs: «That is, for every ruble invested by a company in the purchase of such products as I just mentioned, there is a tax deduction of one and a half rubles,» the president said. Against this background, the shares of the leading Russian developer of products, solutions and services in the field of cybersecurity Positive Technologies showed rapid growth, which rose in price by more than 7% during the day. At the end of the week, the company’s shares rose by 4.1%.

In addition, V. Putin announced the opening of a new national project «Data Economy», to which 700 billion rubles will be allocated over the next six years. «I believe that by 2030 we need to create digital platforms in all key sectors of the economy and social sphere,» the president said. According to the head of state, such projects open up great opportunities for planning the economic development of individual industries, regions and cities. «These statements were positively received by the shares of Yandex, which will certainly become one of the beneficiaries of new measures to support the IT sector. The company is already a leader in the implementation of digital services and generative artificial intelligence, and its products are highly likely to become one of the foundations for the implementation of the national project,» explained Konstantin Tserazov. At the same time, the Yandex shares were also supported by the statement of the head of VTB A. Kostin, who said that the bank, as a minority shareholder of Yandex, continues to own the stake and expects its value to increase. Against the background of general positivity in the IT sector, Yandex shares soared by 9.3% over the week, becoming one of the leaders among blue chips.

Speaking about the situation on the market, the expert noted that the market continues to be supported by corporate stories and expectations of dividend payments. «Perhaps now dividend expectations are the main factor of optimism. The market expects that in 2024 the volume of dividend payments will be about 5 trillion rubles. The beginning of March on the market seems quite positive against the backdrop of good reporting by companies, as well as a fairly good external background, the absence of strong negativity from external sites, it is clearly visible that the medium-term upward trend is maintained in the market. Although this week will be shortened due to the holidays, it can be assumed that the Moscow Exchange index will try to storm the 3300 point mark,» predicts former senior vice president of Otkritie Bank, economist Konstantin Tserazov.