The Russian stock market began the week with a drawdown below 2100 points on the Moscow Exchange index against the backdrop of a strengthening ruble and expectations of new anti-Russian sanctions from the EU, sales were constrained by positive signals from external markets (Brent oil exceeded $105 per barrel). Shares of FGC (+14.8%) and Rosseti (+7.7%) soared on news of the company merger, as well as Ozon receipts (+9.1%) and Yandex papers (+3.5%) on the statements of Russian President Vladimir Putin.
As a result of trading, the Moscow Exchange index amounted to 2096.42 points (-0.6%), the RTS index rose to 1168.73 points (+0.6%); the prices of the majority of „blue chips” on the „Moscow stock exchange” decreased by 4.4%.
The dollar sank to 56.5 rubles (-0.68 rubles).
Shares of Inter RAO (-4.4%), NLMK (-3.3%), Gazprom Neft (-2.6%), RusHydro (-2.5%), Severstal ” (-2.4%), Norilsk Nickel (-2%), ALROSA (-1.9%), LUKOIL (-1.7%), AFK Sistema (-1.7% ), Rosneft (-1.4%), MMK (-1.4%), TCS Group receipts (-1.3%), papers of Polyus PJSC (-1.2%), NOVATEK ” (-0.7%), Sberbank (-0.6% and -0.5% „prefs”), „Gazprom” (-0.5%), Polymetal (-0.5%), „Surgutneftegaz” (-0.4% and -2.5% of preferred shares), MTS (-0.3%), UC Rusal (-0.3%).
The shares of FGC UES rose to 10.17 kopecks on news of the merger of the parent company, PJSC Rosseti, with FGC, as well as news of the buyout price from those who disagree with the merger.
The buyout price from those who do not agree with the reorganization of „Rosseti” (rose to 0.6748 rubles) will be 0.6058 rubles. per ordinary share and 1,273 rubles. for prefs („prefs” fell by 3.1% to 1.208 rubles). The buyout price for FGC shares is set at 9.04 kopecks. An extraordinary meeting of shareholders of FGC on this issue will be held on September 14 (the date of closing the register – August 17), Rosseti – on September 16 (the register will close on August 19).
OZON receipts (+9.1%), Yandex (+3.5%), Moscow Exchange (+0.5%), VTB (+0.5%), Tatneft (+ 0.2%), Aeroflot (+0.1%), Magnit (+0.1%).
The total volume of trading in shares based on the Moscow Exchange index for the day amounted to 21.32 billion rubles (of which 4.56 billion rubles fell on ordinary shares of Sberbank, 3.18 billion rubles on the securities of Gazprom and 1.42 billion rubles on the shares of Lukoil „).
Russian President Vladimir Putin considers it necessary to create mechanisms in a short time that will allow Russian fast-growing companies to attract capital for their development in the Russian financial markets. According to Putin, we are talking, in particular, about such companies as Ozon and Yandex.
The tax benefit, which encourages citizens to invest in securities of Russian issuers from the high-tech sector of the economy, is proposed to be extended for 5 years, Finance Minister Anton Siluanov said at a meeting of the Council for Strategic Development and National Projects. This proposal was supported by the head of the Bank of Russia Elvira Nabiullina.
Evgeny Linchik, head of the share management department at Pervaya Management Company, notes that the Russian stock market showed mixed dynamics of „chips” while maintaining high volatility. The growth leaders were the sectors of consumer durables, technology and healthcare. On Tuesday, mixed dynamics can be expected to continue, the benchmark for the ruble index of the Moscow Exchange is 2090-2150 points, for the RTS index – 1120-1180 points.
In the meantime, the mood on the global markets is optimistic due to a good start to the reporting season – the corporate results of companies will have the greatest impact on the direction of the global stock market. On Tuesday, data on inflation in the eurozone will be published, in the US there will be data on the number of new buildings. The appetite for risky assets pushes oil prices up.
Alexey Golovinov, a leading analyst at Promsvyazbank, notes that on Monday the leaders of the decline were shares of commodity exporters due to the strengthening ruble, as well as telecoms. Most companies in the mining and metallurgy sector were also under pronounced pressure. Papers of coal-mining companies grew up against the market, supported by high prices for sold raw materials.
FGC shares rose after news of the merger with Rosseti. Shares of OGK-2 added quite well (+5.2%) due to the publication of operating results for the first half of the year. For a similar reason, receipts of X5 Retail Group rose in price – the company provided good operating results for the second quarter.
The Moscow Exchange index will continue to decline on Tuesday, an additional negative factor, in addition to worsening sentiment, will be the dividend cut-off in the shares of Surgutneftegaz and Rostelecom. The target range for the Moscow Exchange index is 2050-2100 points, Golovinov believes.
According to Alexander Bakhtin, investment strategist at BCS World Investments, oil rose on Monday despite news from China, where the number of COVID-19 infections began to rise again over the weekend, as well as from Libya, which reported the restoration of production by about 850 thousand barrels per day. b/s.
In the short term, in the absence of pronounced drivers for strong movements in the Russian stock market, we can expect multidirectional dynamics to continue. On Tuesday, the Moscow Exchange index will be formed in the range of 2050-2150 points, the expert believes.
Andrey Kochetkov, a leading global research analyst at Otkritie Research, notes that Russian stocks were once again under pressure from the strong ruble, trading activity was low.
X5 Retail receipts rose on news of 18.6% Q2 revenue growth. The decline was mainly observed in export-related sectors against the backdrop of the ruble strengthening. Biden’s visit to Saudi Arabia failed to stop the rise in oil prices. Plans were announced to increase spare capacity to 13 mb/d from the current 12 mb/d. However, no official statements were made regarding the increase in current oil production.
According to Alfa-Bank strategist John Walsh, on Monday the growth of global stock markets continued, but the Russian market took a break. Europeans, experiencing an energy crisis and the threat of a recession, are concerned about whether the Russian Federation will resume gas transportation through Nord Stream 1 on July 21. Italy is on the brink of a political crisis that could erupt if Prime Minister Mario Draghi resigns. This uncertainty will put pressure on the ECB at Thursday’s meeting, when the regulator is likely to start a monetary tightening cycle with a 25bp rate hike. Although, according to analysts, this step of increase may not be enough and the ECB is lagging behind the global trend, however, against the backdrop of an impending recession, Christine Lagarde cannot afford to be as tough as the Fed. This is possibly
Toward the end of the week, the EU will present the seventh package of sanctions against the Russian Federation, which provides for a ban on the import of Russian gold. In addition, the EU is likely to clarify its position on trade in Russian food and agricultural products, as well as clarify its position on the transport of goods between the Russian Federation and the Kaliningrad region, Volsh notes.
Overseas Markets
In Asia, stock indices rose on Monday (Japan has a day off – Sea Day, South Korean Kospi rose by 1.9%, China’s Shanghai Composite – by 1.6%, Hong Kong’s Hang Seng added 2.7%), Europe (indices DAX, FTSE, CAC 40 grow by 0.7-0.9%) and the States (indices grow by 0.6-1.4%).
Risk appetite was also boosted by Chinese media reports that China’s central bank has ample monetary policy room and enough tools to support the economic recovery.
The People’s Bank of China (PBOC, the country’s central bank) provided banks with 12 billion yuan in seven-day reverse repo operations. The rate on these transactions remained at the level of 2.1% per annum.
Bank of America (BofA), the second-largest bank in the US, posted a 6% increase in second-quarter 2022 revenue, but its net income fell 33%, in line with forecasts. Net profit of Goldman Sachs in the II quarter halved, but exceeded forecasts (net profit in April-July amounted to $2.93 billion, or $7.73 per share, analysts polled by FactSet on average expected the bank’s net profit at $6.56 per share). share).
Oil
In the oil market, prices are also rising on Monday, traders are evaluating the results of US President Joe Biden’s visit to Saudi Arabia, as well as signals regarding the balance of supply and demand in the world market.
The cost of September futures for Brent by 18:50 Moscow time was $105.68 per barrel (+4.5% and +2.1% on Friday), the August price of WTI was $101.75 per barrel (+4.3% and +1.9% on Friday).
Biden said following the visit that he had discussed with the leadership of Saudi Arabia the issue of oil supplies to the world market. „We had a positive discussion on global energy security and reasonable oil supply mechanisms to support economic growth in the world,” he said. The politician also added that he expects from Saudi Arabia „further steps in the coming weeks.”
Meanwhile, the Saudi ministers stressed that the decision to increase production will be made depending on market conditions and within the framework of agreements within OPEC +.
As a result of the past week, Brent fell by 5.5%, WTI – by 6.9%. Oil prices have been falling since mid-June on fears of a recession in the global economy and, accordingly, a decrease in demand for fuel.
Libya, meanwhile, expects to increase oil exports. Prime Minister Abdul Hamid Dbeiba said on Sunday during a meeting with the new leadership of the state-owned National Oil Corp. that work on fields where production was suspended is being resumed and export ports are resuming their work.