Konstantin Vladimirovich Tserazov: “The market does not yet see tangible drivers for growth”

2023-11-10 12:20:55 Время чтения 12 мин 129

The main events of the week from October 30 to November 3 are commented in our interview by the former senior vice president of Otkritie Bank, economist Konstantin Tserazov.

Domestic indices ended the week in different directions — the Moscow Exchange index fell by 0.4%, to 3208 points, the RTS index, against the background of the strengthening of the ruble, grew by 1.2%, to 1093 points. At the same time, at the end of October, the Moscow Exchange and RTS indices grew by 2.2 and 7.2%.

The opening of the week on the Russian market took place against a moderately positive external background. The Moscow Exchange index, although it managed to close in positive territory on Monday, rolled back from the highs reached during the day and added a symbolic 0.1%. The RTS index grew by 1.4% amid the strengthening of the ruble. Oil corrected after rising on Friday amid easing risks of conflict escalation in the Middle East. The World Bank has released a forecast in which it believes that the average price of a barrel of Brent in the fourth quarter of 2023 will be $90, and in 2024 will drop to $81. At the same time, the bank’s experts stipulate that the intensification of the Middle East conflict could push prices up. Among the events of the day, Konstantin Tserazov noted the reporting of LUKOIL, according to which net profit for 9 months of 2023 according to RAS amounted to 638.6 billion rubles, which is 1.4% less than the same period last year. Revenue fell by 11.6% to RUB 2.063 trillion. Novatek reported an increase in net profit under RAS for 9 months of 2023 to 404.4 billion rubles against 185.58 billion rubles a year earlier. The company’s revenue decreased by 8.3%, to RUB 574.41 billion.

On Monday, the boards of directors of Kuibyshevazot and Inarktika met, at which they recommended paying dividends for 9 months of the year in the amount of 14 and 19 rubles per share, respectively. Representatives of the Mother and Child group of companies also announced their intention to pay dividends after redomiciliation.

Tuesday was marked by a correction against the background of mixed signals in foreign markets and the emerging strengthening of the dollar — the Moscow Exchange index lost 0.8%, the RTS index fell by 1.3%. The shares of Tatneft and RusHydro looked worse than the market, losing more than 2%. Polymetal Group published operating results for the third quarter. and 9 months of 2023, according to which revenue increased by 17% and 22% compared to the same periods last year, and the production of precious metals grew at an annualized rate by 12% in the third quarter and by 6% in 9 months. At the same time, Polymetal shares came under pressure after management stated that the company does not intend to pay dividends this year, but may return to paying dividends by the end of 2023.

On Wednesday, oil prices supported reports of a new round of tension in the Middle East; a barrel of Brent exceeded $86. Investor sentiment was influenced by the uncertainty surrounding the outcome of the US Federal Reserve’s rate meeting, which opened on Wednesday. Against the background of the strengthening of the ruble, the Moscow Exchange index increased by 0.2%, the RTS index added 0.8%. The shares of exporters and the financial sector looked better than the market.

On Thursday, the market opened in positive territory. The reason for optimism was the news following the US Federal Reserve meeting. External sites reacted positively to the regulator’s decision to leave the rate unchanged for the second time in a row, at 5.25-5.5% per annum. At the same time, the department made it clear that it does not rule out a further increase in rates. Fed Chairman Jerome Powell said the regulator prefers a cautious approach to monetary policy. However, there is growing confidence among market participants that rates will not increase until the end of the year. At the same time, the index of business activity in the US services sector fell to 51.8 points in October from 53.6 points in September — this is the minimum figure for five months, Konstantin Tserazov points out.

Konstantin Vladimirovich Tserazov: «Oil is still under pressure — investors’ fears about the escalation of the conflict in the Middle East have significantly decreased. Most likely, this week we will see neutral dynamics.»

By evening, optimism was offset by reports of new US sanctions against Russian companies. The sanctions list included St. Petersburg Exchange, as well as AFK Sistema and a number of its companies. In addition, seven Russian banks were subject to US sanctions: Post Bank, Absolut Bank, HKF Bank, All-Russian Regional Development Bank, Russian Standard, Blank Bank and Russian Regional Bank, and also a subsidiary of NOVATEK Arctic LNG 2.

At the end of Thursday’s trading, the Moscow Exchange index fell by 0.3%, and the RTS index weakened by 0.8%. The outsiders, as expected, were the papers of the St. Petersburg Exchange. Sberbank published strong IFRS reports, which received RUB 1.15 trillion in the first 9 months of 2023. net profit against the forecast at 1.143 trillion rubles; in the third quarter, profit amounted to 411.4 billion rubles. against the forecast of 405.1 billion rubles.

A notable event on Thursday was the successful placement of shares of the Henderson men’s clothing and accessories retail chain at the upper end of the price range, says Konstantin Tserazov. The network placed 4.4 million shares at a price of 675 rubles. for the paper and attracted 3.8 billion rubles; investors estimated the market capitalization at 27.3 billion rubles.

The Moscow Exchange reported an increase in total trading volume — in October 2023, the annual figure increased by 89%, to 135.5 trillion rubles. Compared to September 2023, trading volume increased by 9.2%.

Friday was marked by a slight increase in indices against the backdrop of positive sentiment in foreign markets, the strengthening of the ruble and rising oil prices. As a result of Friday, the Moscow Exchange index increased by 0.4%, the RTS index — by 1.3%. The shares of St. Petersburg Exchange continued to look worse than the market, losing more than 5%. The shares of Moscow Exchange and NLMK fared better than the market. The Board of Directors of Norilsk Nickel recommended paying dividends for 9 months of 2023 in the amount of 915.33 rubles. per share. An extraordinary meeting of shareholders, at which the issue of dividends will be considered, will open on December 7.

Among the corporate events this week, Konstantin Tserazov advises investors to pay attention to the opening of VC financial results for the third quarter, as well as the publication of financial results under IFRS for the third quarter and 9 months from the beginning of 2023 by Softline and TGK-1. At a meeting on Thursday, Phosagro’s board of directors will consider results for nine months from the beginning of the year and the possibility of paying dividends. The extraordinary general meeting of Fix Price shareholders will consider the issue of redomiciliation from Cyprus to Kazakhstan.

On Friday, Sberbank will publish financial results under RAS for October 2023. The Board of Directors of RUSAL will consider the issue of dividends for 9 months from the beginning of the year.

In foreign markets, Russian investors will pay attention to speeches by Fed representatives and the publication of foreign trade and price statistics in China. According to Konstantin Tserazov, next week the Russian market will continue to be influenced by geopolitics, corporate news, oil prices and macro statistics.

«The market does not yet see tangible drivers for growth. At the same time, the new sanctions did not put significant pressure on investor sentiment. Oil is still under pressure — investors’ fears about the escalation of the conflict in the Middle East have significantly decreased. At the same time, Saudi Arabia and Russia announced that they intend to continue voluntary production cuts until the end of the year, the total reduction will be 1.3 million barrels per day. Most likely, this week we will see neutral dynamics,» concludes Konstantin Tserazov, former senior vice president of Otkritie Bank.