The Russian stock market found support in the United States

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Last Tuesday, the main Russian stock indices Mosberg (+1.29%) and RTS (+0.95%) ended with strong growth relative to the levels of the previous close. They were able to more than recoup incurred Monday intraday losses thanks to improving sentiment in the oil market and the stock market in the United States. However, by the end of the main trading in Russian oil futures of Brent crude again slipped below the nearest significant price level of $60 per barrel. And key European stock indexes significantly decreased. However, indexes of RTS and Mosberg still closed near their intraday highs.
Obviously, in favor of the stock exchange yesterday the bulls played the accumulated medium-term oversold of the local stock market. Fracture of the spring and summer uptrend it took place exactly a month ago. During this time the ruble index Mosberg lost more than 6%.
We add that recent passions associated with the tightening of sanctions against Russia from the United States is already “settled”. New external restrictive measures may be announced after quite a long pause. During this time, bidders will have time to repeatedly open and close new mid-term positions.
At the close of formal trading session September futures on the RTS index (RIU9) went into a state of contango with a value of 2.4 points, or about 0.2% relative to the reference indicator. Futures market participants were again close to a neutral assessment of the medium-term prospects of the RTS index.
On the background of large-scale growth of the index of Masuri held at the end of the day, the most liquid stocks ended mostly higher in the range of 1-4% compared to the levels of the previous close.
Strong value growth at higher trading turnover stood paper Tatneft JSC (TATN RM, +3.29%). They were in great demand amid news that the Board of Directors proposed the shareholders to approve the paid interim dividends of RUB 40.11 per common and preferred share. This is about 5.4% from the current price of the company’s voting securities, which is assessed as quite attractive returns. At the same time, preferred securities of OAO Tatneft (TATNP RM, +0.36%) today significantly behind the market. However, it is quite possible to forgive the relative weakness. Unlike ordinary shares, they now trade close to its historical maximum.
A notable event in the second tier was a strong increase in value of the shares of Uralkali (URKA RM, +17.07%). Previously it was known that the planned compulsory purchase of these securities from minority shareholders, followed by delisting on the Moscow exchange. On Monday evening, left a message that they will be acquired at the price of 120 rubles. So yesterday these papers approached the specified redemption price.
However, this corporate history may get an unexpected turn. In the evening came the news that the Association of institutional investors (API) has asked the Central Bank of the Russian Federation with a request to protect the interests of minority shareholders of the potash company. According to the IPA, the cost of redemption of shares of “Uralkali” in the amount of 120 rubles, and could be artificially low.
Much stronger market also closed papers of LUKOIL (LKOH RM, +1.86%), Norilsk Nickel (GMKN RM, +2.04%), Polymetal (POLY RM, +2.55%), OGK-2 (OGKB RM, +2.12%), Lenenergo-up (LSNGP RM, +3.32%).
Shares of Polyus (PLZL RM, -0.77%) has once again updated its long-term high and pulled away from him by the fact of publication of the consolidated financial results of the Issuer for the 2nd quarter of 2019. Semi-annual profit of the gold mining company increased from $358 million to $947 million, however, its adjusted net profit for the same period decreased by 11%, to $608 million
Another significant corporate news was the news that PJSC “Polyus” plans to pay dividends for 1H in the amount of approximately $2.46 per share. This equates to approximately 161 rubles, or 2.4% from yesterday’s closing price of these securities.
This morning the futures on US stock indices show a marked drop in the value within 0.6%. Contracts on Brent crude after an evening drawdown fell by 0.2%. Gold futures rose in price by 0.8%. The Chinese Shanghai Composite index dropped 0.1 percent. Nikkei225 declined by 0.6%.
The external background before bidding in Russia can be characterized as moderately negative. This creates conditions for the opening of index Mosberg with moderate lowering.
• The index Mosberg with a slight decrease of about 0.3%, near the mark 2675 p. as the nearest supports will be the levels 2670, 2660 p. Significant resistance is seen around 2690, 2700 p.
• In the first minutes of trading, the index Masuri will play a slight deterioration in the external background. After moderately negative open he can go into a state of consolidation. Explicit incentives for strong directional movement of the local stock market are not yet available.
• In the afternoon, the main external reference point for participants of the Russian auction will remain the dynamics of oil futures. The commodity market can significantly perk up in connection with the forthcoming publication of the weekly statistics on stocks of oil and oil products from the US Department of energy (17.30 MSK).
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”