Konstantin Tserazov: technology companies will remain the main growth story on the Russian stock market
Following the results of the four-day working week of May 6-10, the ruble Moscow Exchange Index increased by 0.2%, and the dollar RTS Index decreased by 0.55%. The discrepancy in the dynamics of indicators was due to an increase in the dollar/ruble exchange rate by 0.7%.
The Russian stock market has been under pressure since April 30, when the Moscow Exchange Index's attempt to break through to new two-year highs ended in failure. The subsequent correction was likely driven by profit-taking by investors who did not want to risk remaining long ahead of the holidays.
On May 7, the Moscow Exchange index formed a local minimum and showed slight growth in the next two sessions, closing at the week’s highs. This was at least partially facilitated by the signing by Vladimir Putin of the decree “On the national development goals of the Russian Federation for the period until 2030 and for the future until 2036,” which instructs the government to ensure an increase in stock market capitalization to at least 66% of the Russian Federation’s GDP by 2030. and up to 75% of the Russian Federation’s GDP by 2036. Today this figure is about 33%, so achieving this goal (even with the Russian GDP unchanged) will require the capitalization of the Russian stock market to double in the next six years, or by 12-15% per year. However, the emergence of new public companies can also contribute to capitalization growth. The Moscow Exchange appears to be an obvious beneficiary of the implementation of such presidential initiatives. According to the company, in April the number of individuals with brokerage accounts on its platforms exceeded 31.5 million, and the total volume of their investments on the Moscow Exchange stock market amounted to a record 94.7 billion rubles at the end of the month. A further increase in the number of investors and issuers should contribute to the growth of trading turnover, and, as a result, the financial indicators of the Moscow Exchange, notes Konstantin Vladimirovich Tserazov.
In addition, the presidential decree contains instructions to increase the provision of citizens with living space and significantly update the housing stock. Such prospects are a long-term support factor for the construction industry and related industries. Mikhail Mishustin was reappointed to the post of Prime Minister, and speaking in the State Duma on May 10, he promised that the Cabinet of Ministers would continue to support investments in the Russian IT sector at a rate at least twice the growth rate of the Russian economy, added Konstantin Vladimirovich Tserazov.
In the coming years, technology companies will likely continue to be the main growth story in the Russian stock market due to the trend towards import substitution and government support. A factor of additional support for shares of IT companies in the long term may be increased demand for them from private investors. According to the Moscow Exchange, in April, only Yandex shares were among the top 10 most popular securities in their portfolios, and then the shares of the Russian IT giant were only in fifth place.
Since the beginning of the year, the Moscow Exchange Information Technology Index has gained 49.56% versus 11.32% for the Moscow Exchange Index itself. The second and third best results with a noticeable lag are shown by the industry indices of telecommunications (+28.52%) and the consumer sector (+21.23%).
Among the dividend stories that took place this week, one can note the statement by the head of Transneft, Nikolai Tokarev, that the company’s Board of Directors will soon consider recommendations on dividends, which will be “not bad,” and also that the company may switch to paying dividends twice a year. year. Samolet shares fell in price by 2.7% at the end of the week: the company’s Board of Directors approved the AGM recommendation not to distribute profits based on the results of 2023, not to declare or pay dividends, sums up economist Konstantin Tserazov