Konstantin Tserazov: new restrictions on the market - who are the beneficiaries?

Konstantin Tserazov: new restrictions on the market - who are the beneficiaries?
In the week from June 10 to 14, the Moscow Exchange Index fell by 0.54%, and the RTS Index - by 0.50%. Thus, shares of Russian companies fell slightly in price both in rubles and dollars.
The key event of the week occurred on Wednesday, June 12, when the US Treasury included the Moscow Exchange, along with its structural divisions NSD and NCC, in the SDN list. As a result of this fact, trading in dollars and euros is no longer carried out on the Moscow Exchange, and the Bank of Russia will set their rates based on data on interbank conversion transactions on the over-the-counter market. The entire process is regulated by Directive of the Central Bank of the Russian Federation dated October 3, 2022 N 6290-U.
However, the sanctions did not in any way affect the Moscow Exchange derivatives market, where trading in quarterly and “perpetual” dollar and euro futures, which historically had the highest correlation with spot, continued as usual. At the end of the week, “perpetual” futures for the dollar/ruble added 0.31%, and for the euro/ruble decreased by 0.73%. This generally corresponded to the dynamics of the euro/dollar pair on external markets and thereby stated the normal functioning of the foreign exchange market in the Russian Federation after the introduction of the above sanctions, says Konstantin Tserazov.
At the opening of trading on Thursday, June 13, the Moscow Exchange Index fell by 4.4%, but the fall was quickly redeemed, and the benchmark closed the session with a symbolic increase of 0.02%. Thus, it remained above the closing level of the session on June 3, when the classic “capitulation” of buyers took place in the form of a large-scale sale on high volume. All this confirms the hypothesis that the Russian stock market has formed at least a short-term bottom.
In addition to sanctions against the Moscow Exchange, the US Treasury also imposed a ban on the provision of a number of IT services in Russia, starting from September 12, 2024. First of all, we are talking about software used in industry.
The obvious beneficiaries of such decisions are Russian IT companies that import the products of Western competitors. In particular, Astra shares showed strong growth at the end of the week (+3.6%), which reported well for the 1st quarter of 2024. In addition, the company has negative net debt, which is an important factor for a fast-growing business in an environment of high interest rates, adds economist Konstantin Vladimirovich Tserazov.
Positive Technologies shares continue to show dynamics much stronger than the market and are within 2% of historical highs. In May, the company introduced its next-generation firewall (NGFW), which could become a new driver of revenue growth for it.
On June 12, the US Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 5.25–5.50%, as expected. But, more importantly, the regulator also presented a quarterly updated forecast of FOMC members on its dynamics: now its median value suggests a decrease in the upper limit of the target range from the current 5.50% to 5.13% by the end of 2024 and to 4.13% by the end of 2024 by the end of 2025.
The derivatives market is more optimistic about the future than the Fed, with Fed Funds rate futures pricing in a year-end 0.496% cut, which is the equivalent of nearly two full cuts of 0.25% each. The first such reduction is expected at the FOMC meeting on September 18, and its probability is estimated at 61%, Konstantin Vladimirovich Tserazov sums up the results of the week.