Despite the sanctions, the financial market started the week with growth

Despite the new packages of sanctions from the United States and Europe, the financial market started the week with growth. The Moscow Exchange index grew by 2.3% during the day and returned above the level of 3200 points. The dollar exchange rate fell by 48 kopecks during the day, to 92.37 rubles/$. Public companies that fell under sanctions showed a decline in stock prices at the beginning of trading, but at the end of the day they were able to win back the decline, and some even showed an increase.

New packages of large-scale sanctions announced by Western countries last week had little effect on the Russian stock market. From the first minutes of trading on February 26, shares of public companies that were blacklisted came under pressure – NOVATEK, TMK, Mechel, Sovcomflot, Yuzhuralzolota (UGK), PIK, St. Petersburg Exchange (sanctions were imposed against the depositary of the St. Petersburg Exchange -jar). At the opening of trading, the shares of these issuers sank by 0.5–8.2%. However, during the day they all recovered most of the decline, and some were even able to reach positive dynamics. In particular, NOVATEK shares ended the day with an increase of 0.9%, PIK – by 1.2%.

“Despite the increased sanctions pressure on a number of companies, in general the market did not find critical risks in the next packages,” notes investment strategist at BCS World of Investments Alexander Bakhtin.

“Investors “exhaled” when they saw the new packages, since much more ambitious measures were expected,” notes Natalia Pyryeva, an analyst at Digital Broker.

In particular, market participants feared that the National Clearing Center (NCC), a division of the exchange through which settlements of transactions, including those with currencies (dollar and euro), would fall under American sanctions. Therefore, three days before the announcement of the final sanctions, a bearish game began on the market, which led to a drop in the Moscow Exchange index by more than 3%, to 3145 points, the minimum since the beginning of January.

As a result, trading on Monday on the Moscow Exchange took place in a positive manner. The MOEX index had already exceeded 3,200 points by 11:20, and at the end of trading it stopped at 3,213.17 points, which was 2.3% higher than the closing level on February 22. The index fully recovered the decline that occurred at the end of last week due to expectations of sanctions.

Tough Western sanctions now, in general, do not have a traumatic impact on the securities of Russian companies, as was the case in the first months after the start of the SVO, experts agree.

According to investment strategist of Arikapital Management Company Sergei Suverov, this became possible, among other things, due to the policy of de-dollarization and reorientation of export flows to the markets of friendly countries pursued in recent years: “Issuers have reduced the share of exports in operations, such as TMK and ” Mechel” and focused on supplies to the domestic Russian market.”

Some issuers generally focus exclusively on the domestic market, in particular PIK, whose shares ended the day with higher prices. “The positive is due to the fact that developers work in the domestic market, mainly using domestic technologies and materials, and receive loans from Russian banks,” notes Natalia Pyryeva.

The sanctions also had a limited impact on the ruble exchange rate.

If at the beginning of the day the dollar on the Moscow Exchange rose to 93.36 rubles/$, then at the end of the day it stopped at 92.37 rubles/$. This is 48 kopecks. below last Thursday’s close. As in the case of the stock market, each subsequent restriction has less impact on the Russian economy and the domestic financial market, since there is no surprise effect. More fundamental for the ruble exchange rate, says Vladimir Evstifeev, head of the analytical department of Zenit Bank, are the basic factors: trade surplus and current account balance.

Vitaly Gaidaev