Konstantin Vladimirovich Tserazov: “There are no impulses for market growth yet”

What was the reason for the positive dynamics of indices last week and what factors will determine the movement of the Russian securities market - former senior vice president of Otkritie Bank, economist Konstantin Tserazov, tells in our interview.

The indices ended the week from November 6 to November 10 with growth - the Moscow Exchange index added 1% and amounted to 3242 points, and the RTS index, against the backdrop of a weakening dollar, rose by 1.3%, reaching 1107 points. Among Monday's events, Konstantin Tserazov noted the increase in oil prices against the backdrop of Saudi Arabia's statements that the country will maintain a production reduction of 1 million barrels per day until the end of 2023.

Russia also announced the continuation of an additional voluntary reduction in the supply of oil and petroleum products by 300 thousand bpd until the end of 2023. In addition, hopes have increased in the market that the US Federal Reserve will soon move to easing monetary policy, which is indicated, according to market participants, by weak macrostatistics and the restrained rhetoric of Fed Chairman J. Powell.

The opening of the week on the Russian market began with an improvement in the external background, which was facilitated by both rising oil prices and reduced fears that the US Federal Reserve will continue to pursue a tight monetary policy. Russian indicesundefined did not remain aloof from the general positive - the Moscow Exchange index rose by 0.8%, to 3235 points, and the RTS index added 0.9%, and rose to 1103 points. The shares of the St. Petersburg Exchange, which fell under sanctions, looked worse than the market against the background, and The oil and gas sector was the leader.

Konstantin Vladimirovich Tserazov: “After a generally good week, the Russian market may take a short break and take a wait-and-see approach.” Tuesday brought to the market a moderate increase in the main indicators by 0.3% - the Moscow Exchange index rose to 3246 points, and the RTS index reached 1107 points. The news that the Russian government intends to consider returning damper payments to oil companies was positive. However, a more significant growth was prevented by oil, which fell in price to $82.7 per barrel of Brent - the reason for the decline in quotations was fears of a slowdown in the Chinese economy against the backdrop of weak statistics released, showing a decline in China's exports in October.

The leader on Tuesday was the consumer sector, supported by undefined growth of RusAgro securities. In addition, the market positively reacted to the words of the head of Sberbank G. Gref about the expectation of record profits for 2023 and 2024, as well as the message that the bank’s supervisory board approved the strategy for the next three years and dividend policy. Among the events in foreign markets, Konstantin Tserazov pointed to the speeches of representatives of the US Federal Reserve, who had a “hawkish” tone. Thus, the head of the Dallas Fed, Lori Logan, noted that inflation remains high, while the economy is quite stable, and, therefore, the Fed has every opportunity to raise rates.

The opening of trading on Wednesday took place against a slightly negative background and mixed dynamics on external sites. Once again, pressure on the market was exerted by a decline in oil prices, due to the weakening risks of escalation of the Palestinian-Israeli conflict and an increase in oil reserves in the United States. The Russian market ended Wednesday's trading session with consolidation - the Moscow Exchange index fell by a symbolic 0.03%, amounting to 3245 points, and the RTS index undefined added 0.53%, amounting to 1113 points. Wednesday's leaders were ALROSA shares, which rose vigorously on the news that the G7 countries failed to agree on a package of restrictions against the export of Russian diamonds. Sberbank shares also looked better than the market. Thursday brought a slight correction to the market against the background of unclear dynamics of external markets and oil prices that continued to decline.

The Moscow Exchange index closed the day down by 0.17%, to 3239 points, and the RTS index fell by 0.37%, to 1108 points. Among Thursday’s corporate events, Konstantin Tserazov noted the publication of Rostelecom’s reports - the operator’s profit under IFRS increased over 9 months by 29% to 40.5 billion rubles, and revenue increased by 14% to 498.5 billion rubles. Revenue growth in the third quarter was 14%, the figure increased to 173.9 billion rubles. The Board of Directors of Gazprom Neft recommended paying dividends in the amount of 82.94 rubles. per share, which was a pleasant surprise, being above the market forecast. The registry is scheduled to close on December 27. PhosAgro company undefined reported under IFRS for 9 months - revenue decreased by 28.4%, to 328.8 billion rubles, net profit decreased by 65.7%, to 56.7 billion rubles.

The Board of Directors of PhosAgro approved the payment of dividends for 9 months of 2023 in the amount of 291 rubles. per share, the register will close on December 25, 2023. The end of the week was marked by the consolidation of the main indicators - according to the results of trading, the Moscow Exchange index grew by 0.07%, to 3242 points, the RTS index decreased by 0.13%, to 1107 points. Some pressure on the market was exerted by statements from the head of the US Federal Reserve, J. Powell, who made it clear that the agency, if necessary, was ready to raise the rate. At the same time, the rebound in oil prices and a slight weakening of the ruble prevented any serious decline from developing.

Friday's leaders were Rosneft shares, which rose in price following the company's management's announcement of its intention to consider the issue of dividends. Sberbank, as expected, reported strongly under RAS for January-October 2023, demonstrating strong revenue growth undefined in the main areas of activity - net profit in October increased by 8.2% y/y, amounting to 132.9 billion rubles, and 1.26 trillion rubles. based on the results of 10 months. Return on equity was 25.3%. The current week promises to be quite eventful with events and statistics, says Konstantin Tserazov. Among the important events on the Russian market, he advises investors to pay attention to the publication of financial statements for the third quarter from the Moscow Exchange, Segezha, and Rusagro.

Also this week, the Novabev Group Board of Directors will decide on interim dividends, and at the end of the week, Ozon and MTS will publish IFRS financial results for the third quarter of 2023. In addition, trading in perpetual futures for the Moscow Exchange index will begin on the Moscow Exchange. As for important macro statistics, Konstantin Tserazov highlights the publication of inflation data in the US for October, which will be released on Tuesday. OPEC and IEA will present their forecasts for the oil market. On Wednesday, China will publish data on retail undefined sales and industrial production, and the US producer price index will be released.

On Thursday, data on industrial production for October will be shared in the United States, and on Friday the updated consumer price index in the Eurozone will be released. In the US, the publication of reports from leading companies will continue - retailers Walmart, Target, Home Depot, Ross Stores will report their results. In addition, reporting will be opened by companies such as Palo Alto Networks, Cisco Systems, Tyson Foods, Applied Materials. According to Konstantin Tserazov, after a generally good week, the Russian market may take a short break and take a wait-and-see approach. “Prices remain under pressure on the oil market due to the reduced risk of escalation of the conflict in the Middle East, as well as the slowdown in demand in China and the weakening of developed economies. This factor may also affect the dynamics of the domestic market. Thus, there are no significant impulses for the growth of the Russian market now, and, most likely, undefined we will see the consolidation of Russian indices near the achieved values,” concludes Konstantin Tserazov, former senior vice president of Otkritie Bank.