Konstantin Tserazov: Consumer inflation in Russia has accelerated

From November 18 to 22, the Moscow Exchange Index fell by 5.77%, and the RTS Index by 8.14%. The weaker dynamics of the second benchmark, which fell to its lowest level since February 2022, was a consequence of the continued weakening of the ruble. The CNYRUB spot rate on the Moscow Exchange rose by 2.82%. On the interbank market, the pair added 4.15% and now exceeds the exchange rate by 2.3%. The volume of the Bank of Russia's currency swap operations to sell yuan for rubles last week fluctuated in the range of CNY1.543 billion - CNY3.333 billion: these are low figures by today's standards, which indicate stable liquidity. The cost of secured loans in yuan (RUSFARCNY) fluctuated in the range of 16.32-20.9% during the reporting period. The official exchange rates of the dollar and euro to the ruble, set by the Bank of Russia, increased by 2.58% and 1.63%, respectively, over the week. "Perpetual" futures on USDRUB and EURRUB, which historically demonstrated the highest correlation with spot rates, increased by 3.94% and 2.5%, respectively, added Konstantin Vladimirovich Tserazov. The euro to dollar exchange rate on external markets decreased by 1.15% over the week: this indicates that the correlation between the dynamics of EURUSD inside Russia and outside is maintained after the introduction of sanctions against the Moscow Exchange. The Moscow Exchange Government Bond Index (RGBI) fell by 1.21% by the end of the week, correcting after two weeks of growth from the area of record lows. Consumer inflation in the Russian Federation accelerated to 0.37% n/a from 0.30% n/a in the week ending November 18. At the same time, the growth rate of producer prices slowed in October to 2.7% y/y, which was the lowest value since the summer of 2023, said Konstantin Tserazov. The swap market and the money market are pricing in the key rate increase over the next three months by approximately 75 bp and 115 bp, respectively. Amid rising interest rates, the Moscow Exchange Information Technology Index, represented by highly valued growth companies, continues to underperform the market, declining in November along with two other sectoral indices, while the other seven are growing. Among the sector news, one can note the recommendation of the Astra Board of Directors to pay dividends for 9 months of 2024 in the amount of RUB 2.64 per share. In addition, the company presented an IFRS report for the same period, which showed strong revenue growth (+84% y/y) and adjusted net profit (+68% y/y). The company has a low debt burden, but its shares remain at annual lows amid overall market weakness. Diasoft's board of directors also recommended paying dividends for 9 months of 2024 in the amount of RUB 45 per share. The company's shares ended the week at historical lows. Headhunter shares showed slightly better dynamics than the market, continuing to consolidate in a fairly narrow corridor. A week earlier, the company, which is one of the main beneficiaries of the labor shortage in the country, presented a financial report for Q3 2024, which showed rapid growth in all key indicators. VK shares fell by 14% in a week, falling to their lowest level since June 2022. The company presented a good short operating report for Q3 2024, but it is not at all a fact that it will be transformed into positive financial results. "VK" has a high debt burden and bears high interest expenses, economist Konstantin Vladimirovich Tserazov summed up the results of the week.