The Russian stock market closed Thursday with strong gains

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Last Thursday, the main Russian stock indices Mosberg (+0.98%) and RTS (+1.27%) ended with strong growth relative to the levels of the previous close. This partly contributed to the moderate intraday improved external background. Most encouraging external signal made by a corrective increase in oil prices. Futures on Brent crude has managed to significantly move up from the important price level of $60 per barrel.
Care below this support would form a strong technical signal of further falls. Well, this morning they are already trading near its weekly highs. Moreover, the oil contracts remain the technical potential for restoration in the neighborhood of $65. We have to admit that the recent selloff in the oil market wore excessive emotional nature.
Another motivation for yesterday’s improved sentiment on the local stock market was the opening of the St. Petersburg international economic forum. It is logical that in the framework of this event took out of a number of important positive corporate news. In addition, the information flow was saturated with a large number of loud statements of the first persons of large Russian companies.
At the close of formal trading session, the June futures on the RTS index (RIM9) came to the state of backwardly a value of 19 points, or 1.4% relative to the reference indicator. Futures market participants have softened generally negative assessment of the medium-term prospects of the RTS index.
On the background of significant growth of the index of Masuri held at the end of the day, the most liquid stocks ended mostly higher in the range of 1-3% relative to the levels of the previous close.
Among blue chips significantly stronger than the market traded securities of Sberbank JSC (SBER RM, +2.46%), Sberbank-up (SBERP RM, +2.53%). This week they were supported by the stability of the domestic currency, which is very frostily reacted to the recent slump in oil prices. A positive role was played by the emerging resolution of troubled Antipinsky oil refinery. Now this production asset under the control of the joint venture of Sberbank and the State oil company of Azerbaijan.
Shares of RusHydro (HYDR RM, +2.85%) were in high demand, despite the news that the net profit of the Issuer according to IFRS decreased by 31.0% for the 1st quarter of 2019. Total revenue of RusHydro for the period slightly increased by 0.8%. The head of holding Nikolay Shulginov managed to reassure holders of these securities. He stated that the amount of dividend payments in 2019 will be close to the corresponding figure for 2018.
Paper rosseti JSC (RSTI RM, +2.34%), Russian grids Pref (RSTIP RM, +5.19%) significantly outperformed the market on the background of statements of the head of the Issuer Pavel Livinsky that electricity distribution company is planning to fall to be introduced in the Ministry of energy’s new dividend policy. Now in this matter there is some uncertainty. The Board of Directors recommended not to pay dividends for 2018 in connection with the loss. At the same time, it is planned to pay dividends for the 1st quarter of the current year.
In addition, this year, a possible additional payment of interim dividends. Do not forget that at the end of 2017 Mr Livinsky was initiated on the release of “Rossetti” from the payment of dividends with the aim of restraining the growth of tariffs for electricity. So its new dividend policy can bring unexpected surprises.
Significantly weaker than the market traded securities of the oil company Rosneft (ROSN RM, -0.77%). Probably their holders alerted the talks that the issue of restructuring the debt of Venezuela to Rosneft currently not discussed. It is no secret that for a hypothetical deferral of payment of the debt the country has very significant economic and political conditions. However, Russian President Vladimir Putin said yesterday that Venezuela maintains its commitment rhythmically and in time.
This morning the futures on US stock indices show a moderate increase in value within 0.15%. Contracts for Brent crude rose by 1.4%. Gold futures lost 0.2%. Stock markets in Hong Kong and China are closed today. Japanese stock index Nikkei225 has added 0.6%.
The external background before bidding in Russia can be characterized as positive. This creates conditions for the opening of index Mosberg with moderate growth.
• The index Mosberg with a moderate increase of about 0.3%-0.4% in the area 2735-2740 p. as the nearest supports will again be levels 2720, 2710 p. Significant resistance is seen around 2750, 2760 p.
• After a moderately positive opening, the index Mosberg may continue to increase in district 2750 p. This contributes to evening the improving sentiment in the oil market, and continued this morning.
• In the second half of the day is the key external reference point for participants in the local trading will remain the dynamics of oil futures. In Europe and in the United States have a large number of macroeconomic indicators. On the local stock market some indirect effect can have a formal publication of the may block of statistics on the condition of the ore market in the United States (15.30 GMT).
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Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”