The Russian stock market is starting 2019 growth

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In the last trading day of 2018, the main Russian stock indices Mosberg (+0.46%) and RTS (+0.24%) closed with a moderate increase in relation to the levels of the previous closing. In the first minutes of trading they performed an obvious improvement of the external background, held the night before. On Saturday, the local stock market
were completely isolated from any influence of the external background. Therefore, trading volume was expected to be small. After a positive opening, the indices Mosberg and RTS went into a state of unprincipled consolidation until the end of the day.
After completion of the main trading session on Saturday became finally known the results of annual trading on the Russian stock market. By the end of 2018 ruble index Mosberg increased by 12.3%. At the same time dollar-denominated RTS index has lost 7.42%. In our view, among these two indicators in the first place is to take into account exactly dollar-denominated RTS index. Therefore, it is necessary to recognize that at the end of last year, the Russian stock market still suffered moderate losses. However, long-term investors can take comfort in is quite comparable to the value of interim and annual dividends on the shares of many mining companies. This primarily relates to securities of oil and gas companies.
By the way, the branch index of Oil and gas MICEXO&G at the end of last year has increased by 36.29%. However, the dramatic quarterly drawdown of oil prices specified index does not yet have a large potential to further improve in the new year. Most likely, he will pass the torch to the advancing growth of the index of Metals and mining MICEXM&M. as for the indices of the sectors focused on domestic demand, their medium-term prospects not yet appear to be clearly optimistic.
At the close of evening trading session on Saturday March futures on the RTS index (RIH9) came in as a minor backwardly size p. 3.5, or about 0.3% relative to the reference indicator. Futures market participants were close to the neutral rating 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 trading day, the most liquid stocks ended mostly higher in the range of 1-3% relative to the levels of the previous close.
Retail sales growth stood out papers “Transneft” -AP (TRNFP RM, +4.62%). In the large-scale one-day gain the stock has managed to recover in the middle part of its three-month range 160000 RUB–RUB 178000 Thus, medium-term technical picture in these papers has improved to neutral. Probably, interest to these actions fueled the news about plans to create a digital bridge between Japan and Europe via Russia. This project can be implemented on the basis of a subsidiary company of the Issuer “Transneft-Telecom”.
It is already providing services in the field of data transfer using resource of the backbone network connection. The total length of this network on the main route is around 16000 km. in addition, from 1 January 2019, the existing tariffs for the services of PJSC “Transneft” on oil transportation via the system of trunk pipelines will be increased by 3.87%.
Strong growth at a high speed also distinguished paper Mosenergo (MSNG RM, +3.70%). Such a large increase took place against the publication of controversial statements of the Issuer for the 3rd quarter of 2018. On the last trading day of the year referred to paper has managed to update its four-month high. Incentive to continue the medium-term game on increase in them can be a probable break above the nearest significant price level of RUB 2.1
Significantly stronger market also closed paper Rosneft (ROSN RM, +1.54%), Tatneft JSC (TATN RM, +2.23%), Acron (AKRN RM, +2.39%), RUSAL plc (RUAL RM, +1.52%), SAFMAR-AO (SFIN RM, +3.61%), Yunipro (UPRO RM, +1.80%).
Much worse than index Mosberg closed paper Sberbank JSC (SBER RM, -0.11%), Norilsk Nickel (GMKN RM, to 0.26%), VTB (VTBR RM, -0.18%), Bashneft-up (BANEP RM, -0.42%), FIVE-GDR (FIVE RM, -1.23%).
Before you start trading in Russia the futures for US stock indices show a strong uneven decline in the value within 1.5-2.5%. Contracts for Brent crude fell by 1.3%. Gold futures added to the price of 0.6%. The Chinese Shanghai Composite index dropped 0.1 percent. Hong Kong’s Hang Seng lost 0.7%.
The external background before bidding in Russia can be described as negative. However, futures for Brent crude traded today at about 2.5% higher than pre-Christmas levels. This fact to some extent softens the morning external the negative.
• The index Mosberg with a significant decrease of about 0.8%, near the 2350 p. as the nearest supports will be the levels, 2340, 2330 p. Significant resistance is seen around 2370, 2380 p.
• In the first minutes of trading, the index Masuri will play morning a noticeable deterioration in the external background. Later he can go into a state of consolidation in anticipation of important external signals.
• In the afternoon some influence on the local stock market may render the publication of a number of statistical indicators in the United States. The most important of these will be a weekly change in the number of initial claims for unemployment benefits (16.30 GMT).
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”