Investors warmed up – Newspaper Kommersant No. 68 (7513) of 04/19/2023

The Moscow Exchange Index (MOEX) has consolidated above 2600 points, having updated the annual maximum and having added more than 9% since the end of March. Among the positive factors, market participants note the growth in oil prices combined with the weakening of the ruble, the expectation of reinvestment of dividends from large issuers, as well as the “weakening of the geopolitical factor”. As a result, analysts do not rule out an increase in the index to 2700 points.

On April 18, the Moscow Exchange Index updated its maximum since April 11, 2022, reaching 2615.62 points. This is 0.72% higher than the closing value on April 17, but the steady growth of the index has continued since the end of March. Since then, MOEX has added more than 9%, and in general since the beginning of the year – more than 21%.

Now the shares are in demand due to the weakening of the ruble and improved forecasts for Russia’s GDP in 2023 and are considered as an alternative to the currency and protection against inflation, explains Natalia Malykh, Head of the Equity Analysis Department of FG Finam. In particular, the Ministry of Economy expects GDP growth in the next two years by 1.2% and 2.0%, respectively, while last fall the estimates were -0.8% and +2.6%. According to Ms. Malykh, investors choose cyclical sectors and rely on economic growth, highlighting the banking sector and transport.

Also, the market is supported by a favorable conjuncture of the oil market. In particular, in early April, OPEC + decided to reduce oil production by 1.65 million barrels per day (b / d) until the end of 2023 (see Kommersant on April 4). Thanks to this, according to Investing.com, Brent quotes have gained more than 7% since the end of March, gaining a foothold above $85 per barrel. The price of the Russian brand of oil Urals grew at a faster rate, which made it possible to significantly reduce the discount (see Kommersant dated April 18).

As a result, the oil and gas index of the Moscow Exchange became the leader of growth over the past two weeks, adding 8%. The March report of the IEA gives confidence in the successful future of oil producers, says Daniil Bolotskikh, an analyst at Tsifra Broker. The report states that in March, Russia was able to increase exports by 0.6 million b/d, to 8.1 million b/d, a record since April 2020.

Support the optimism of investors and other industries. Thus, since the beginning of April, the metal and mining index of the Moscow Exchange has grown by 7%. Shares of gold mining companies Polyus and Polymetal were in high demand among investors. Quotations were supported, according to Mr. Bolotskikh, by a steady rise in gold prices.

On the world market, the precious metal quotes remain above $2,000 per troy ounce, while on the Russian market they exceed 5.2 thousand rubles/g, having added more than 7% since the beginning of the month.

In addition, the stock market is being driven by expectations of new liquidity inflows in the form of dividends. In particular, annual meetings of shareholders of Sberbank and NOVATEK are to be held on April 21, at which record dividends are expected to be approved. The dividend yield of the shares of the largest Russian bank is almost 11%, the gas company – 4.6%. Since mid-March, when the decision of the board of directors on dividends was announced, Sberbank shares have gained more than 30%. During the same period, NOVATEK shares rose by more than 20%. The closing of the registers of shareholders of these issuers is scheduled for May 11 and 3, respectively. As a result, by the end of next month, investors can receive (based on the free-float estimate) more than 300 billion rubles.

“The absence of serious negative geopolitical triggers in recent days has provided some support to the market,” adds Anna Mikhailova, an analyst at Ingosstrakh Investments.

In the near future, market participants expect continued growth, although not too rapid. Daniil Bolotskikh estimates the local maximum for the MOEX index at 2650-2660 points. The analyst expects his achievements until the end of April due to the continued growth of shares of Sberbank and the oil and gas sector.

At the end of the year, Oleg Syrovatkin, a leading analyst at the Otkritie Investments global research department, believes that the Moscow Exchange index may reach 2,700 points, although “it is now very overbought.” Additional pressure, according to the expert, may be exerted by a possible strengthening of the ruble.

Ksenia Kulikova