In Tuesday Russian stock indices closed on the negative side. The main negative factor for the market was yesterday’s Russian government resolution that “Gazprom” will not pay dividends for 2023. “Despite the fact that the payout was already unlikely, investors’ trust has finally faded. Currently, stock prices are at the level of early 2018,” commented Nikita Stepanov, an analyst at FINAM. As a result, the Moscow Exchange index fell by 1.15% to 3428.38 points, while the RTS index weakened by 1199.26 points.
Selling in “Gazprom” (-3.7%) accelerated already during Monday’s evening session when news of the Russian government directive became known. Such a negative investor reaction to the news was likely due to the fact that the directive on dividend non-payment came from the government even before the board of directors’ decision, which is scheduled for May 23,” says Elena Kozhukhova, an analyst at VELES Capital.
Pressure on “Novatek” (-1.1%) quotes continues due to Western sanctions targeting Russian LNG-related projects.
“Seligdar” securities (-2.7%) corrected after a sharp rise the day before.
AFC “System” shares (+3.7%) are rising on the news of being allowed to trade on the SPB Exchange shares of the “Element” company from May 30 – a joint venture of “System” and “Rostec”. This means that the company’s IPO can be expected around the same day. “If the Element IPO is successful, similar placements could be a hope for the entire exchange business, which almost completely stalled after being added to the SDN list last fall,” believes Nikita Stepanov.
“RUSAL” shares (+2.7%) rose on reports of considering a buyback of shares.
“MMK” securities (+2%) are supported by the dividend theme, as the board of directors recommended a payout of 2.752 rubles per share for 2023.
Dividends support buying sentiment in Moscow Exchange stocks (+1%), with the board of directors recommending a payout of 17.35 rubles per share for 2023.
Pessimistic sentiment in the Russian market today was supported by a drop in oil prices. By now, Brent has dropped to $82.82 per barrel, Light to $78.5 per barrel. The raw materials market is not helped by expectations of a rate cut in the United States amid positive inflation data released last week. Today’s drop occurred despite ongoing geopolitical tensions in the Middle East.
Meanwhile, the ruble is ignoring oil price dynamics and continues to strengthen, approaching the 90 mark against the dollar. In the evening Forex session, the dollar dropped to 90.33 rubles, while the euro decreased to 97.88 rubles. “Supporting the ruble is the mandatory sale of export revenue and currency sales within the budget rule,” notes Maxim Fedosov, a portfolio manager at First Investment Company. The toughening rhetoric of the Central Bank of Russia, keeping the key rate at an elevated level of 16%, also supports the ruble.
The sharp increase in the key rate in 2014 led to a decline in the bond market. A similar situation has now emerged — in 2023, the key rate increased to 16%, causing a decrease in the quotes of some OFZs. Learn which OFZs, according to FINAM analysts, could benefit from a key rate cut.
