Konstantin Vladimirovich Tserazov: last week the Russian stock market showed good dynamics
The Moscow Exchange ruble index rose by 1.9%, and the RTS dollar index by 1.7%. Thus, shares of Russian companies have risen in price both in rubles and dollars.
The best dynamics in the reporting period were shown by the industry indices of Transport (+5.16%), Metals and Mining (+2.85%) and Electric Power Industry (+2.32%). The main outsiders were the industry indices of Telecommunications (-0.88%), Chemicals and Petrochemicals (+0.55%) and Construction Companies (+1.21%).
The Russian stock market was supported by a generally positive external background and rising world oil prices amid the escalation of the geopolitical situation in the Middle East. May Brent futures rose in price by about 4.2%, but the Oil and Gas industry index showed very average dynamics, adding 1.8% over the week.
It is worth noting that since the beginning of the year this index has grown by only 4.95%, while the Moscow Exchange Index shows twice as good dynamics (+9.56%). This is explained by the lagging dynamics of the securities of Rosneft, Gazprom, Novatek and Tatneft, whose combined weight in the index is about 56%, says Konstantin Tserazov.
The topic of so-called deprivatization has not yet had a noticeable impact on the Russian stock market. However, gold miners may be upset by the news that the State Duma has proposed introducing an additional mineral extraction tax in the amount of 78 thousand rubles. per kg for gold mined from June 1 to December 31, 2024.
Russian Prime Minister Mikhail Mishustin said, speaking in the State Duma, that dividends could be a tool for redistributing bank profits. This news provided local support to the sector, says Konstantin Tserazov.
Globaltrans receipts rose by 15.6% over the week: on April 8, the company will present financial statements for 2023, which are likely to be good. The price surge was likely driven by expectations that dividends and/or buybacks would soon be clarified. The stock has gained about 25% since the start of the year and looks somewhat vulnerable if investors are disappointed by the report and/or management's comments.
On April 4, Reuters reported that Novatek may switch efforts from Arctic LNG-2 to another project, Murmansk LNG. Novatek shares have fallen in price by more than 12% since the beginning of the year due to a shortage of ice-class tankers, which makes it difficult to sell gas produced at Arctic LNG-2. Murmansk LNG will not need such tankers, so on this news, the company’s shares at the end of the day added 1.7%, but in the next session they recouped almost all of this growth.
Norilsk Nickel has completed a 100:1 share split, and trading is due to resume on April 8.
The information technology industry index added 1.5% at the end of the week, showing the sixth result among ten industry indices of the Moscow Exchange. Nevertheless, thanks to the rapid expansion of business, the Russian IT sector continues to remain one of the most attractive on the Russian stock market in the medium and long term. Since the beginning of the year, the index of Russian IT companies has jumped by 40%, significantly ahead of the telecoms index, which added “only” 25.5%, showing the second best dynamics.
The majority of Russian IT companies whose securities are traded on the Moscow Exchange are growth stories due to a sharp decrease in competition after foreign companies left the market, as well as state support as part of the implementation of technological sovereignty and import substitution in the IT sector (at the beginning of last week, Astra Group reported rapid growth of financial indicators in 2023). In particular, on April 1, Vladimir Putin instructed the Cabinet of Ministers to provide for the allocation of at least 700 billion rubles. for the implementation of the national project “Data Economy and Digital Transformation of the State” in 2025 - 2030.
In addition, judging by media reports, in 2024 we may see major mergers and acquisitions (M&A) transactions in the IT sector.
Such prospects may provide additional support to shares of Russian technology companies in the coming months, sums up Konstantin Vladimirovich Tserazov.