The Russian stock market is gradually losing momentum

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Last Thursday, the main Russian stock indices Mosberg (-1.17%) and RTS (-0.62%) ended with significant reduction in relation to the levels of the previous closing. For the first time in many days we saw quite a large-scale drawdown of ruble-denominated index Mosberg. It has long been overbought. So its yesterday’s fall was long overdue. However, medium-term technical picture of the indexes of RTS and Mosberg still remains positive. In order to significantly worsen, they need badly enough to fall from current levels.
If we talk about yesterday’s state of the external background, it could be characterized as ambiguous. Key stock indexes in Europe and USA closed “piecemeal”. In addition to this morning the rising cost of oil futures was confused in the second half of the day. And yet the oil market continues to be supported in connection with a number of medium-term disturbing factors. Among them, essential week reduction of stocks of crude oil in the United States, the preservation of high geopolitical risks in the middle East, as well as beginning the season of tropical storms in the oil-rich area of the Gulf of Mexico.
At the close of formal trading session September futures on the RTS index (RIU9) came to the state of backwardly a value of 19 points, or 1.4% relative to the reference indicator. Futures market participants remain negative assessment of the medium-term prospects of the RTS index.
Against the background of fairly strong subsidence of the index Mosberg held at the end of the day, the most liquid stocks ended mostly lower in the range of 1-3% relative to the levels of the previous close. It should be noted that the last day was poor with significant corporate news. Therefore, significant movements in individual securities were technical in nature or were associated with the events of the previous days.
The leader of the fall among the blue chips made paper Surgutneftegaz-Pref (SNGSP RM, -2.99%). Apparently, some of the holders of such shares chose to commit them substantial medium-term profit, without waiting for the dividend cut. From mid-may, they rose by about 14%. Just last week, these securities had updated its three-year maximum. The impetus for this was the high dividend yield. Annual shareholder distributions on them will be 7.62 RUB, or about 18.2% of the current market price. Preference shares “Surgutneftegaz” will be traded with an annual dividend on the Moscow exchange by the end of next Tuesday, July 16.
In the shares of ALROSA (ALRS RM, -2.49%) continued sales related to the recent publication of weak sales results of the Issuer in June. They were the lowest since the beginning of this year. Yesterday the above securities dipped below multi-month support level, which was located near the RUB 84 the Next significant support for them are located at the level of 80 rubles.
It is worth noting the rapid drop in the relative liquidity of many representatives of the electricity sector: FGC UES (FEES RM, -3.02%), Russian grids JSC (RSTI RM, -3.01%), Russian grids Pref (RSTIP RM, -2.35%), RusHydro (HYDR RM, -2.66%), Inter (IRAO RM, -1.47%). All of these securities increased dramatically in price in the period from mid-may to mid-June. Now they quite naturally develops a corrective decline. Sector index of electric power industry MOEXEU since the beginning of this month lost 3.59%. However, since the beginning of 2019, he is still in the black at 19.46%.
Among the blue chips positive dynamics distinguished only by the shares of VTB (VTBR RM, +0.16%). However, yesterday’s gains were very modest. The result is a large-scale six-week increase these already look overbought; paper. Yesterday they failed to exceed the nearest important resistance level located in area of 0.045 RUB Possible, overcoming it will require several attempts.
Main information about medium for growth of VTB’s shares are expectations of increase in dividend payout to 50% of the Issuer’s net profit for FY 2019-2022 years. From a technical point of view, these paper began to reduce its strong long-term backlog of gone far index Mosberg.
This morning the futures on US stock indexes rose moderately in the range of 0.2-0.3%. Contracts for Brent oil grew in price by 0.6%. Gold futures added 0.1%. Chinese stock index Shanghai Composite rose 0.4%. Nikkei225 grew by 0.1%.
The external background before bidding in Russia can be characterized as moderately positive. This creates conditions for the opening of index Mosberg with some growth.
• The index Mosberg with moderate increases of about 0.2-0.3%, in the area 2795-2800 p. as the nearest supports will again be levels 2780, 2770 p. Significant resistance is seen around 2810, 2820 p.
• In the first minutes of trading, the index Masuri will play morning a moderate improvement of the external background. Later he can go into a state of consolidation around the nearest important level of 2800 p.
• Output relevant to the local market to foreign macroeconomic statistics today is not scheduled. Therefore, the second half of the day, the main external reference point for participants of the Russian auction will remain the dynamics of oil futures.
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”