The Russian stock market is hanging in there because of oil
Today, the index finished Mosberg growth in the range of 0.1% to 2293 points, and its currency analogue of RTS following the strengthening of the ruble even found the strength to add more than 0.9 percent to 1162 points.
The external background to the evening is clearly not conducive to purchasing activity: the American S&P 500 index lost 0.4%, while the European STOXX 600 was down 0.24%. Among the heavyweights in leaders of falling again was marked by Facebook, the paper which continues to update annual lows amid weak reporting and unexpectedly pessimistic management forecasts regarding the growth rate of revenues and expenditures of the company.
Active sales are in the whole high-tech segment, but a full-fledged panic – overheated paper is simply returned to the normal evaluation from the point of view of fundamental indicators. News flow is moderately positive: the foreign Ministers of China and the UK, said that discussing the initiation of negotiations on free trade between the two countries after Brexit.
Russian shares among the outsiders was Yandex (-6,1%), M. Video (-4,4%) and Polymetal (1.6 million%). The leaders of growth were AFK Sistema (+4,8%), “Surgutneftegaz” (AP: +2.3%) and Moscow exchange (+1.9 percent).
Growth driver “the System” delivered the news that the holding company has repaid the loan to the state FUND and Gazprombank 40 billion rubles, secured by the shares of “Children’s world”. Thus, potential sale of securities opens the way to further reduce debt, which has arisen in connection with the claims of “Rosneft”.
The main oil varieties by the end of the day added in the range of 2.2%: the barrel of Brent cost $75,6, and WTI – $70.2 percent. The weekly report from Baker Hughes on Friday showed that the number of rigs drilling for oil in the U.S. rose 3 PCs to 861.
Dollar on the Moscow stock exchange lost 0.9% to 62.2 rubles, and the Euro was down 0.5 percent to 72.9 RUB. In our view, current price levels are significantly overvalued relative to fundamentally justified values, due to the aspects of the budget policy of the Ministry of Finance, the ratio interest rates of Central banks and General macroeconomic conditions. We expect a gradual rebalancing in the foreign exchange market, previously observed for 2017 and Q1 2018.
It corresponds to the range of 55.5-61. The direct effect of the April sanctions objectively insignificant in scales of the Russian economy, the risk of new restrictions, including against the Russian national debt is too small. By weakening the political rhetoric of the US authorities (in fact, we are already witnessing this process) non-residents will be returning to the ruble debt, which will create preconditions for the transition of the currency pair dollar/rouble to the aforesaid range of vibrations. We confirm our forecast for the end of 2018 57.7 ruble per dollar in the baseline scenario.
At the evening session of the expected strengthening of the ruble against the U.S. dollar, the index of Mosuri will remain mostly flat at the current values due to external background.