The Russian stock market will add significantly to the opening

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Last Friday, the main Russian stock indices Mosberg (+0.12%) and RTS (-0.12%) ended with a slight directional deviation in relation to the levels of the previous closing. They spent the trading day in as unprincipled consolidation within the boundaries of very narrow bands. It was to be expected, since the local stock market was completely isolated from the influence of the external background. Key stock markets in Europe and in USA were closed due to the fact that in Catholic countries, was celebrated on good Friday.
In connection with Friday’s slight deviation indexes of RTS Mosberg and medium-term technical picture in them remained unchanged. It can be estimated as positive. As we see, the specified indices remain near their recent highs. Meanwhile, futures for Brent crude once again updated its annual high.
This morning they are trading around $74 a barrel, what appears to be a clear positive for the Russian stock market. The only predictable threat is the likelihood of tightening of the external sanctions regime against Russia by the US. However, the implementation of this threat for quite a long time postponed indefinitely.
At the close of Friday’s formal trading session, the June futures on the RTS index (RIM9) came to the state of backwardly a value of 20 points, or about 1.6% relative to the reference indicator. Thus, the futures market participants remain 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 the day mixed with a moderate deviation in the range of 1-1.5% against the levels from the previous close.
Leader modest increase among blue-chip made of paper Severstal (CHMF RM, +1.18%). The reason for the moderate purchase activity in them was a message stating that the Issuer’s Board of Directors recommended shareholders to approve dividends for the first 3 months of the current year in the amount of RUB 35.43 per share. Thus, their quarterly dividend yield may be of the order of 3.4% of the price of Friday’s close.
Perhaps the specified corporate news will be the impetus for further medium-term increase of cost of papers “Severstal”. In case of a breakdown close to the resistance level, located near 1060 RUB, they formed a signal to continue the game to improve. In this case, new technical target for these shares will be the price level 1100 RUB.
Paper Enel Russia (ENRU RM, +1.74%) were also in demand on the background of corporate news related to the recommendations on the dividends. The Board of Directors proposed to pay shareholders 0.141471 RUB per share by 2018. Thus, their dividend yield could reach about 13.5% of the price of Friday’s close. The register of shareholders entitled to receive dividends will be closed on 8 July 2019.
Shares of the Group “M. Video-Eldorado” (MVID RM, +1.00%) continued growth in high gear following the recent publication of quarterly operating statements of the Issuer. In particular, it became known about increase in net sales of the Group for the first quarter of 2019 by 11.7% compared with the same period a year ago. In addition, quarterly comparable sales (LFL) for the Group increased by 2.2%. It can be stated that the process of integration of retail chains M. Video and Eldorado completed successfully.
A notable event in the second tier was a strong fall in the value of securities, OJSC Nizhnekamskneftekhim JSC (NCNC RM, -20.05%), NKNK-AP (NCNCP RM, -27.15%). Fortunately, such a large-scale one-day drawdown was due to the fact that they experienced a gap of dividend on the Moscow Exchange. Generous annual dividends on such shares will amount to RUB 19.94 They will include retained earnings from previous years. As we can see, Friday, the drawdown of the securities of the company were comparable to the size of the upcoming dividend payout.
Before you start trading in Russia the futures on US stock indexes moderately declined in value within 0.2%. Contracts for Brent crude rose strongly at 2.4%. Gold futures have increased in price by 0.4%. Japanese stock index Nikkei225 has grown by 0.1%. China’s Shanghai Composite index sank 1.6%.
The external background before bidding in Russia can be characterized as uncertain or mixed. However, the strong morning rising cost of crude oil creates conditions for the opening of index Mosberg with a noticeable increase.
The index Mosberg with a significant increase of around 0.5%, near 2575-2580 p. as the nearest supports will be the levels of 2560, 2550 p. Significant resistance is seen around 2590, 2600 p.
In the first minutes of trading, the index Masuri will play the strong morning rising cost of oil futures. Later it can continue the inertial climb in the area 2590-2600 p.
Key equity markets in Europe are closed again today. Therefore, in the second half of day dynamics of the local stock market can only affect the nature of the start of trading in the United States. In addition, at 17.00 GMT for March will be released statistics on the change in the volume of sales in the secondary housing market in the United States.
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”