Dividends came to the market – Newspaper Kommersant No. 48 (7493) dated 03.22.

The Moscow Exchange Index reached its maximum since mid-September, amounting to 2431.2 points. Despite the fact that the index failed to stay above the level of 2400 points, the three-day rally on the Russian market added more than 6%. The optimism of private investors was supported by the announcement of large-scale dividends by large issuers, primarily Sberbank. The improvement in economic expectations also adds to the positive. However, the foreign policy agenda remains dominant, which is holding back market recovery for the time being.

On March 21, during the main session, the Moscow Exchange Index (MOEX) updated the maximum since September 20, 2022, reaching 2431.2 points, 1.4% higher than the closing value on Monday. Despite the fact that it was not possible to maintain the achievement and the index rolled back below 2400 points, at the close of the main session it still exceeded the close of the previous day by 0.04%.

Even with the correction, MOEX rose by more than 6% in three days. At the same time, the activity of investors remained at an elevated level for the third trading day in a row. The volume of trading in shares from MOEX reached 75 billion rubles. (against RUB 84 billion on Monday and RUB 108 billion on Friday, see “Kommersant” dated March 17). These figures are two to three times higher than in previous days of March.

The rally in the Russian stock market is mainly due to good earnings reports and purchases of shares “for dividends”, primarily securities of Sberbank.

Last Friday, the bank’s supervisory board decided to pay a record dividend of 25 rubles. for both common and preferred shares. At that time, this gave more than 13% dividend yield, in three days the shares of the largest bank rose in price by 16-17% and exceeded 204 rubles. The shares of Sberbank together form about 16% of the index.

However, the growth leaders of recent days were the securities of NOVATEK, PhosAgro, InterRAO, which also announced dividends for 2022 with a yield of 6-8%. Even VTB papers showed an impressive rise in quotations on the eve of statements by the bank’s management about record quarterly profits.

The positive dynamics of the market is also associated with improved expectations for the economy, including against the backdrop of the visit of Chinese leader Xi Jinping to Moscow.

Support should come from the transition to developing the economy according to a new model, reducing inflation, as well as indexing payments to state employees, due to which “home” industries, such as food retail, should also feel good, says Natalya, head of the equity analysis department at FG Finam Small.

Contribute to optimism and expectations of the announcement of key decisions in the context of expanding cooperation between Russia and China. In particular, the interaction between the countries to develop the potential of the Northern Sea Route, through which in 2022 the volume of cargo transportation amounted to about 34 million tons, was considered, said Mikhail Shulgin, Head of the Global Research Department at Otkritie Investments.

High liquidity will help bring the market back to the level of 2,500 points, says Alexander Dorozhkin, head of the share management department of Ingosstrakh-Investments Management Company. Growth of shares may continue by inertia on the background of the release of annual reports and decisions of the board of directors on dividends and reach 2600-2700 points before the summer, Ms. Malykh believes.

But Tsifra Broker analyst Daniil Bolotskikh does not yet see clear drivers for continued growth. In the near future, he expects consolidation near the level of 2400 points. Mr. Shulgin predicts a correction to 2310 points.

This may be partly due to the large proportion of individual investors who are more likely to be speculative (see “Kommersant” February 17). In particular, the Moscow Exchange reported that 1.1 million private investors took part in trading on Monday, almost twice their average daily number last year. At the same time, the share in the trading volume amounted to 81%.

In addition, not all issuers, even having received a profit at the end of last year, are going to share it with shareholders. In particular, the boards of directors of Raspadskaya, Polymetal, TCS Group, Ros Agro decided not to pay dividends. The pressure on the Russian market is also exerted by the foreign policy background. Moreover, according to Natalia Malykh, “the external agenda remains dominant.”

Ksenia Kulikova