Optimism about dividends supports market growth

On Wednesday, the Russian market continued to set local highs, reaching 3318.14 points. By the end of the day, the Moscow Exchange index rose by 0.29% – to 3310.58 points, the RTS index added 0.35% and stood at 1151.68 points. The growth on the market was led by “Sber”, which had surpassed the 300 mark yesterday but now seems to be stuck below it. Meanwhile, “LUKOIL” reached a new all-time high today, now trading at 7561.5 levels. It also emerged as the trading volume leader, surpassing “Sber”. The rise is attributed to the upcoming report and expected dividends. The board of directors’ recommendation should be announced in the second half of April. Analysts paint bright prospects for the stock if no major unforeseen events occur. “At the moment, we maintain a moderately positive view on Lukoil’s shares – our target price for them is 8,395 rubles, representing an upside of 11% excluding dividends,” forecasts Sergey Kaufman, an analyst at FINAM. Anna Builakova, an analyst at Figures Broker, sets an even higher target for the stock: “Our target price for LUKOIL shares is 8700 rubles per share, with an upside of 15%.” Gold miners also outperformed the market as gold continues to break records: “Polyus” (+3.45%), “Seligdar” (+2%). Currently, the precious metal is trading at $2152.8, reaching as high as $2158.4 during trading. “One of the main factors is the large volumes of gold purchases by central banks, who are starting to fear holding too much in dollars and euros after the precedent with Russian OFZs,” explains Alexey Krchetov, the creator of the ProfitGate website. “NOVATEK” shares rose by 2.76%, NLMK (+1.5%). RusHydro shares gained 1.55% in price – the company today presented its financial results for 2023 according to IFRS, with profits amounting to 32.1 billion rubles compared to 19.3 billion rubles in 2022. QIWI (-2.4%) continues to decline, Yandex saw a high volume drop of 1.3%, X5 also lost 1.3%. By the end of the day, the dollar fell by 0.02% to 90.5 rubles, the euro rose by 0.03% to 98.68, and the yuan declined by 0.11% to 12.544. “Maintaining the key rate at a relatively high level, as well as a large share of foreign exchange revenue that exporters are obligated to return to the country and sell on the domestic market, will continue to support the ruble. As a result, the baseline scenario assumes that in March the dollar will range from 90-92 rubles, with a likely increase towards the upper range by the end of the month,” says Dmitry Babin, a stock market expert at BCS World of Investments. “Black gold” is on the rise: by 20:40 Moscow time, Brent crude oil is up 1.8% at $83.53, while a barrel of Light is priced at $80.04 (+2.4%). The quotes are supported by a weaker dollar and inventory data from the US Energy Department. In Europe, trading closed with a 0.5% increase. American indexes are positive: as of 20:45 Moscow time, the S&P 500 index is up 0.9%, Dow Jones adds 0.58%, and Nasdaq is up 1.12%. Nvidia shares (+3%) are setting new records. Trading took place in anticipation of Federal Reserve Chairman Jerome Powell’s testimony to Congress. “The Fed chief stated in his remarks that further rate cuts in the US will be postponed until there is confidence that inflation is nearing the 2% target level. The Federal Reserve chairman also warned that premature easing of monetary constraints could reverse the current progress in controlling inflation and require even stricter measures in the future,” notes Polina Shchukina, an analyst at FINAM. Source link