The Russian stock market is in a hurry to finish the week confident growth

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Last Thursday, the main Russian stock indices Mosberg (+1.38%) and RTS (+1.44%) ended with a strong increase towards the levels of the previous closing. Members of the local trades could not and did not want to ignore the obvious intraday improvement of the external background associated with hopes for the resumption of the negotiating process between the US and China on the conclusion of a trade agreement. The reason for this was the statement of the official representative of the Ministry of Commerce of the PRC that China will not immediately reply to a new increase in import duties announced by the US President.
The said step is interpreted as a gesture of good will on the part of China. Of course, this is not the latest plot twist in a protracted trade conflict. Anyway, it caused a state of euphoria in global stock markets. In addition, he benefited and oil quotations. Futures on Brent crude once again managed to exceed the nearest significant price level of $60 per barrel. Well, the ruble index Mosberg yesterday managed to update my four-week high. Thus, it formed a medium-term signal for further games to enhance Russian shares. But first, the index Mosberg need to be able to gain a foothold at that level.
At the close of formal trading session September futures on the RTS index (RIU9) came in as a minor backwardly value of 2 points, or about 0.15% relative to the reference indicator. Futures market participants remain neutral assessment of the medium-term prospects of the RTS index.
On the back of strong growth index Mosberg 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. It should be noted that the last day was saturated with important corporate news. Therefore, in the individual securities have been fairly large-scale movement.
The leader of increase among blue chips were shares of LUKOIL (LKOH RM, +3.10%). They continued to play on Wednesday the release of positive semi-annual financial statements of the Issuer in accordance with IFRS. Besides, yesterday it became known that the oil company is finalizing a new program to repurchase shares. Another positive signal to investors and speculators was the news that the Board of Directors of “LUKOIL” to recommend the payment of interim dividends in October 2019.
On the wave of yesterday’s purchases of papers of LUKOIL has approached the upper boundary of its two-month range, located in the area of 5400 RUB. In the case of a steady breakdown of the specified level they will have a good chance of further recovery in the area of 5700-6000 RUB.
Shares of Gazprom (GAZP RM, +2.07%) was in demand amid the semi-annual financial statements of the Issuer in accordance with IFRS. For the period attributable to the shareholders of Gazprom’s profit increased by 32.6% to 836.5 billion. Such positive dynamics of this indicator allows to count on growth of annual dividends. By the way, the head of “Gazprom” Alexei Miller yesterday announced plans to transition the company to the payment of dividends in the amount of 50% of IFRS net income. The company Board will consider a new dividend policy on November 28 this year.
The shares of Mostotrest (MSTT RM, +4.11%) has risen strongly in connection with the news that the semi-annual net profit of the Issuer according to IFRS increased in 4.2 times, up to the level of 2.6 billion RUB In the same time, revenue decreased in the accounting period by 34% due to the decline in construction volumes. The current improved financial result was achieved due to the reduction in net financial costs, which is an indirect sign of increased business efficiency.
Noticeably weaker the growing market for traded securities of Polymetal (POLY RM, -0.84%), Raspadskaya (RASP RM, -0.44%), Transneft Pref (TRNFP RM, -0.59%), TGK-1 (TGKA RM, -1.15%), Mechel JSC (MTLR RM, -0.53%), Mechel-Pref (MTLRP RM, -0.89%).
This morning the futures on US stock indices show a slight increase in value within 0.1%. Contracts for Brent crude on the brink of positive and negative deviations. Gold futures have increased in price 0.1%. Chinese stock index Shanghai Composite rose 0.3%. Nikkei225 rose by 1.2%.
Given the strong closure of the stock market in the United States and evening of the rising cost of oil futures, the external background before bidding in Russia can be characterized as positive. However, the index Masuri not yet have an explicit prerequisites for a substantial increase in the first minutes of trading.
The index Mosberg with minor deviation within 0.3%, near the mark 2715 p. as the nearest supports will be the levels 2700, 2690 p. Significant resistance is seen around 2730, 2740 p.
After a neutral opening, the index Mosberg with the big share of probability will go into a state of consolidation on the reached on the eve of the level. Explicit the preconditions for the continuation of yesterday’s active buying of Russian shares are not yet available.
In the afternoon some influence on the course of local trading can provide the output of a large number of statistical indicators in the United States. The most important will be the publication of the final August index of consumer confidence from the University of Michigan (17.00 GMT).
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Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”