Page 30 - Eastern Europe Outlook 2020

Finally, for resident-non-resident operations, the average daily turnover in the ruble amounted to $12bn - 38% more than three years ago, RBC reported.
• Stocks
Russia’s stock market performed better than anyone dared to hope in 2019, returning 45% over the whole year with the dollar denominated Russia Trading System (RTS) index finally breaking out of its 900-1,300 range to end the year around 1,500.
Analysts at ​BCS Global Markets​ expected the RTS to return 17% in 2020 with the RTS at 1,500, but the RTS had already broken through the 1,600 level by the end of the first week of January.
Other analysts are predicting the market will return at least 20% in 2020, which is the typical return for the Russian market in any non-crisis year. But those analysts were predicting 20% gain and for the RTS to rise to 1,500, when it had already risen by another 100 points in January. The typical return for the market in a crisis year is -75%.
What the market will do in 2020 remains heavily dependent on politics and oil prices. The average dividend yield in 2019 was 6.5% and this is expected to increase to 7% in 2020, largely driven by the biggest SOEs finishing off their transition to paying out 50% of profits as dividends. In the past few years high dividend yielding stocks have consistently outperformed the market. Earnings are also expected to improve further in 2020 on the back of the ongoing modest economic recovery.
The gain in 2019 was caused by a number of factors, chief amongst them being:
- reduced political risk and fear of new sanctions receding; - strong and rising earnings per share (EPS) at the leading
companies;
- reduced political risks and receding fears for new harsh US
sanctions;
- exceptional dividend payments that are twice the EM average; and
30​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com