The Russian stock market today will focus on oil

  • And
  • +A

Last Tuesday, the main Russian stock indices Mosberg (+0.33%) and RTS (+0.57%) ended with a moderate growth relative to the levels of the previous close. They managed to win their morning noticeable drawdown associated with the dividend gap in heavy promotions of “Sberbank”. Moreover, the index of Masuri once again updated its historical high, closely approaching the level 2760 p.
This was facilitated by intraday moderate improvement of the external background. It was associated with the failure of the US’s recent plans for the introduction of import duties in respect of goods from Mexico as asymmetric measures on the flow of illegal migrants from that country. A positive role has continued to play and expectations of a possible reduction in interest rates by the fed in mid-June. The President of the United States Donald trump reiterated that the fed keep rates too high.
It should be noted that the indices of Mosuri and RTS remains positive technical pattern in all time ranges. However, this situation may change at the end of the week. The main threat to the local stock market indices stands the renewed deterioration in sentiment in the oil market. This morning futures for Brent crude traded on the brink of the nearest significant support level of $60 per barrel. Confident drawdown below this level would be very worrisome technical signal of further falls.
At the close of evening trading session on Tuesday, the June futures on the RTS index (RIM9) came in as a moderate backwardly the size at 12 points, or about 0.9% relative to the reference indicator. Futures market participants have softened generally negative assessment of the medium-term prospects of the RTS index.
On the background of insignificant growth of the index of Masuri held at the end of the day, the most liquid stocks ended mostly higher in the range of 1-3% relative to the levels of the previous close.
The most noticeable movement on the local stock market was expected drawdown of securities Sberbank JSC (SBER RM, -5.27%), Sberbank-up (SBERP RM, -6.08%). They experienced a dividend the gap in trading mode T+2. In General, their one-day drop was slightly smaller than the size of the annual dividend will amount to RUB 16 for both types of shares.
Noticeably weaker market also closed paper Magnet (MGNТ RM, -0.42%), ALROSA (ALRS RM, -0.30%), RusHydro (HYDR RM, -1.70%), FGC UES (FEES RM, -0.69%), OGK-2 (OGKB RM, -0.82%), Bashneft-up (BANEP RM, -0.59%).
The leader of increase among blue chips for the first time in a long time were the shares of Norilsk Nickel (GMKN RM, +3.26%). They are in demand on the background of recent media reports that the current dividend policy of the Issuer will remain unchanged. Earlier, the President and principal shareholder GMK “Norilsk Nickel” Vladimir Potanin spoke in favor of the reduction of dividend payments in connection with large-scale capital investment mining and metallurgical company.
As a result of strong one-day increase of the action “Norilsk Nickel” has managed to recover in the middle part of its four-month range 13400-14800 RUB Thus, medium-term technical picture in them has improved to neutral. A clear incentive for the purchase of these securities in the medium term may be only a confident break of the upper border of the specified range. The obstacle to such movements can be rapid closure of the register of shareholders for payment of final dividend for the year 2018. Their value will be 792.52 RUB, or about 5.5% from the current price. Cut-off scheduled for 21 June 2019.
Paper Transneft-Pref (TRNFP RM, +2.50%) rose significantly in connection with the statement by the Vice-President of the Issuer Rashid Sharipov that the company plans to pay dividends for the year 2018 in the amount of about 10400 RUB per share, which corresponds to 6.3% of their current value. This became another confirmation of the fact that the losses “Transneft” related to the recent contamination of the network of trunk pipeline “Druzhba” can have an impact on the amount of dividends already by the end of 2019.
This morning the futures on US stock indices show an uneven decline in the value within 0.2%. Contracts on Brent crude after yesterday’s drawdown rose by 0.7%. Gold futures added to the price of 0.2%. Chinese stock index Shanghai Composite rose by 0.1%. Nikkei225 declined by 0.8%.
The external background before bidding in Russia can be characterized as uncertain or mixed. Morning the rising cost of crude oil, only partially offset yesterday’s drop. Therefore, the index Mosberg with some dropping.
• The index Mosberg with a slight decrease of about 0.1-0.3%, in the area 2740-2750 p. as the nearest supports will be the levels 2730, 2720 p. Significant resistance is seen around 2760, 2770 p.
• In the first minutes of trading, the index Mosberg can win back yesterday’s notable decline in the value of oil futures. Later, he likely will go into a state of consolidation around the opening levels.
• In the afternoon, the main external reference point for participants in the local trading will remain the dynamics of oil prices. Some influence on the course of trading in Russia may also have the publication of the weekly number of initial claims for unemployment benefits in the United States (15.30 GMT.).
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”