Page 25 - RusRPTFeb21

a lot more persistent compared to previous years.
Every component in the consumer confidence index experienced declines, with the biggest deterioration seen in the sub-index measuring household macroeconomic expectations (-22% in 4Q20 vs. -15% in 3Q20).
The sub-indexes measuring household perceptions of previous macroeconomic changes, changes in households’ personal well-being and their outlook on the future saw drops of 3-4ppts q/q. Sentiment for big-ticket purchases fell 3ppts q/q to -34% in 4Q20 (vs. -24% a year ago) and sentiment for savings also dropped 3ppts q/q (-42%).
“The CCI’s 4Q20 decline was expected, in our view. The lifting of lockdowns at the end of 2Q20 spurred positive expectations of an economic recovery, resulting in an improved CCI in 3Q20 despite still showing a significant decline y/y. However, hopes of a swift recovery and normalization turned out to be premature, aggravated by the depreciation of the ruble in 3Q20, mounting inflation and stagnating consumer incomes,” Sova Capital said in a note.
“That said, we do not think that the drop in CCI should have a negative read-across for the 4Q20 results of X5 and Magnit, which we expect to be strongly supported by elevated at-home food consumption and the continued consolidation of the market. We are looking for revenue growth of c. 13% y/y for X5 (due tomorrow, 22 January) and revenue growth of c. 11% y/y for Magnit (due 4 February). Similarly, worsening sentiment for big-ticket purchases should not necessarily mean poor figures for M.Video in 4Q20 (due 2 February). The economics of working at home should support the company’s sales, suggesting solid demand for home office equipment, digital entertainment products and various home appliances,” Sova Capital added.
25 ​RUSSIA Country Report​ February 2021 ​ ​www.intellinews.com