Konstantin Tserazov: “The absence of fundamental reasons will not allow the market to demonstrate significant growth”

How the Russian market lived in the week from December 18 to 22, what events influenced its dynamics - former senior vice president of Otkritie Bank, economist Konstantin Tserazov, told us in our interview.

The week opened in positive territory — despite the ambiguous external background, Russian indices grew following rising oil prices. In general, the trading week from December 18 to 22, Russian indicators ended in different directions — the Moscow Exchange index grew by 1.9%, to 3092 points, the RTS index weakened by 0.3% and reached 1057 points. The growth of the Moscow Exchange index was facilitated by the weakening of the ruble, which dropped to the level of 92.12 rubles/dollar. The positive trend was also contributed by oil, which by the end of the week had risen in price from $76.55 to $79.46 per barrel of Brent amid escalating tensions in the Middle East.

Threats of attack by the Yemeni Houthis in the Red Sea are forcing shipowners to limit the use of the Suez Canal, which significantly lengthens the delivery time for oil from Arab countries to Europe. On Monday it became known that the European Union approved a new, 12th package of sanctions, which included a ban on the import of diamonds and measures to control compliance with the flow of oil prices, however, this news did not have a significant impactundefined influence on the market. From corporate stories, Konstantin Tserazov noted the news about the approval by the board of directors of MD Medical of a dividend policy, within the framework of which the company will direct payments of up to 100% of profits, as well as accumulated profits. The company’s management has prepared documents on redomiciliation from Cyprus to the SAR. Oktyabrsky in the Kaliningrad region. Against this background, the company’s shares soared by 7.85%.

The shares of Moscow Exchange and Ozon also looked better than the market, adding more than 3%. According to the results of trading on Monday, the Moscow Exchange index exceeded 3076 points, and grew by 1.4%, the RTS index also rose by 1.4%, amounting to 1075 points. Konstantin Vladimirovich Tserazov: «The Russian market will spend the last week of the year against a calm external background — there will be few significant macro statistics, and on Monday and Tuesday Western stock exchanges will be closed for the Christmas holiday.» On Tuesday, the indices began consolidating at the achieved levels — according to the results of trading, the Moscow Exchange index reached 3083 points, adding undefined 0.24%, and the RTS index fixed at 1074 points, weakening by 0.1%. The market was guided by internal stories in the absence of signals from external sites. QIWI receipts showed a significant increase of 28%, while no news was received regarding the company.

The shares of NOVATEK and metallurgists, led by NLMK, fared better than the market amid news about the easing of sanctions restrictions. For the metallurgical sector, the driver of growth was the announcement of the extension of supplies of Russian slabs to the EU until 2028, which will give companies time to rebuild their supply chains. For NOVATEK securities, news about the lifting of EU price ceiling restrictions on the Sakhalin 2 project until June 28, 2024, in order to ensure Japan’s energy security, was positive. Shares of St. Petersburg Exchange soared by 5.2% on the news of agreeing on a strategy for unlocking assets.

On Wednesday, optimism once again dominated the Russian market, supported by corporate stories and rising oil prices. VTB shares grew undefined on the news about the approval by the bank’s supervisory board of a new development strategy for 2024-2026. Investors also showed interest in Softline shares — the company said it expects growth in all financial indicators in 2024, while predicting an increase in turnover to no less than 110 billion rubles, and gross profit to at least 30 billion rub. In addition, Softline announced the likely payment of dividends based on the results of 2024, to which no less than 25% of profit under IFRS will be allocated. It is expected that the amount of dividends paid may reach at least RUB 1 billion.

On Thursday, the Russian stock market closed in negative territory, falling after oil, which went below $78 per barrel of Brent on news of rising reserves in the United States and Angola’s withdrawal from OPEC. At the end of Thursday’s trading session, the Moscow Exchange index fell by 1%, closing at 3073 points, and the RTS index lost 2.16%, dropping to 1051 points. The weakening ruble kept the market from a deeper correction. The underdog of the day was stocks undefined NOVATEK fell on Bloomberg’s report that the company announced force majeure on the future Arctic LNG 2 project. This project, the first stage of which NOVATEK planned to launch in 2023, involves the construction of three stages of liquefied natural gas production. In external news, Konstantin Tserazov noted the publication of the final estimate of US GDP — in the third quarter the figure increased by 4.9% in annual terms against an increase of 5.2% according to the initial estimate.

The number of initial applications for unemployment benefits amounted to 205 thousand, compared to 203 thousand a week earlier; experts expected 215 thousand. On Friday, the Russian stock market was in positive territory against the backdrop of mixed signals from external markets and rising oil. At the end of Friday’s trading session, the Moscow Exchange index increased by 0.62% to 3092 points, the RTS index added 0.54%, amounting to 1057 points. The leaders of the day were Sberbank securities, which grew on the statements of Sberbank head German Gref that undefined In 2023, the bank will receive the highest profit in its history, and shareholders can count on the payment of record dividends. In addition, according to G. Gref, the bank expects net profit growth in 2024 and 2025. The bank’s common shares rose by 2% on Friday, and preferred shares by 2.3%.

Another leader in the sector, VTB Bank, reported an increase in net profit under IFRS for 11 months of 2023 to 417.5 billion rubles. First Deputy Chairman of VTB Dmitry Pyanov said that at the end of the year, net profit is projected at 430+ billion rubles, and that the bank can pay up to 80 billion rubles. dividends for 2025 in 2026 The Russian market will spend the last week of the year against a calm external background — few significant macro statistics will be released, and on Monday and Tuesday Western stock exchanges will be closed for the Christmas holiday. On Thursday, as always, weekly data on the US labor market and American reserves of oil and petroleum products will be released; on Friday, Russia will present an index of business activity in industry. Touching undefined corporate events, Konstantin Tserazov noted that Tuesday will be the last day to be included in the register of shareholders entitled to receive Novabev Group dividends for 9 months of 2023, as well as to be included in the register of shareholders entitled to receive Gazprom Neft dividends for 9 months 2023. The acceptance of applications within the framework of the Mosgorlombard IPO will end on Wednesday; the opening of trading in Mosgorlombard shares after the IPO is scheduled for Thursday, December 28.

On the same day, the annual meeting of Magnit shareholders will take place, on the agenda of which it is planned to discuss the issue of approving dividends. «The domestic market will experience low activity in the absence of external signals. Some impetus to the market may be given by corporate news and the receipt of dividends from Lukoil into investors’ accounts, part of which will return to the stock market as reinvestment. However, a neutral background will rather contribute to market consolidation at the achieved values. Lack of fundamental reasons undefined will not allow the market to demonstrate significant growth,» predicts former senior vice president of Otkritie Bank Konstantin Tserazov.