The market received a message – Newspaper Kommersant No. 33 (7478) dated 22.02.2023

The message of the Russian president to the Federal Assembly cheered up the stock markets. By the middle of the trading session, the Moscow Exchange Index rose by more than 2%, confidently exceeding the level of 2.2 thousand points. But the news about the suspension of Russia’s participation in START moderated optimism, and the overall market growth at the end of the day was at the level of 1.3%. Foreign indices, on the contrary, were falling before Vladimir Putin’s speech and began to recover following its results. For the Russian market, growth may be replaced by a fall against the background of the prospects for the introduction of the tenth package of EU sanctions the other day.

Vladimir Putin’s speech at Gostiny Dvor was generally positively assessed by the Russian stock market. Even at the beginning of trading, the Moscow Exchange index was steadily rising and by 10:50 overcame the level of 2200 points. Then the growth accelerated, and by 13:00 the index reached 2227.82 points, having added more than 2% since the beginning of the day.

The rise took place at the high activity of investors. At the end of the day, the indicator exceeded 60 billion rubles, reaching a maximum since the beginning of February.

In general, stocks from the index, that is, securities of large companies, accounted for more than 82% of the main trades, which has not been observed since mid-December 2022. This year, high trading volumes were noted in low-liquid securities (see “Kommersant” dated February 17). Alexander Tsyganov, director of the investment and corporate business department at Tsifra Broker, specified that “blue chips are the first to react to any events, market changes, as they are more liquid.” However, by the end of the main trading session, the activity of market participants decreased, and the index stopped at 2212.42 points, which is 1.3% higher than the close on February 20.

Market participants expected that in the message of the head of state the main emphasis would be placed on economic incentives. As a result, the market received not only a number of important internal initiatives, but also a number of key external announcements. Andrey Kochetkov, a leading analyst at Otkritie Investments, draws attention to the words of the president about the development of the eastern direction, the financial system, and initiatives for domestic business: “Landmarks for the financial and industrial elite have become an incentive for the growth of Russian shares.” The news about the suspension of Russia’s participation in the Treaty on the Reduction of Strategic Offensive Arms and the Development of the Military-Industrial Complex made investors nervous. “This made adjustments, and the excitement subsided,” Alexander Tsyganov notes.

International investors apparently expected the worst from Vladimir Putin.

An hour before the start of circulation, the leading European stock indices fell by 0.7-1%. The leaders of the fall was the German DAX index, which sank a little more than 1% to 15.42 thousand points. “Uncertainty ahead of the performance was high, and in order to reduce risks, the most nervous investors reduced their positions, which is normal,” notes a trader at a large brokerage company.

However, with the start of the speech, Western indices began to recover and by 13:00 they won back the main part of the decline. As a result of trading, they closed only 0.3-0.5% lower than the previous day. According to Sergey Suverov, investment strategist at Arikapital, in general, Europe assessed the speech of the President of the Russian Federation “as militant towards the West with rather harsh rhetoric, in addition, Moscow suspended participation in the START-3 treaty, which investors perceived negatively.” The European markets were somewhat calmed down, the expert specifies, by the statements of EU officials that they do not expect a recession this year.

Prospects for maintaining the growth of the Russian market remain vague. In the context of the current geopolitical situation and a generally high degree of uncertainty, “investor attention cannot be called stable,” Anna Mikhailova, an analyst at Ingosstrakh Investments, believes. Moreover, by the end of this week, the tenth package of sanctions from the EU is expected to be adopted. How significant they will be in terms of damage to companies and the economy of the Russian Federation as a whole, the analyst notes, as well as the degree of their influence, it will be possible to speak after publication, as well as in the event of the introduction of any significant restrictive measures that have not been discussed in the public field before .

Vitaly Gaidaev