Page 97 - RusRPTAug21

8.3 Stock market
8.3.1 Equity market dynamics
The Moscow Exchange has published retail investor statistics for June.
Local retail investors bought R29bn ($400mn) worth of Russian stocks over the month. This number looks quite average by the standards of last year and so far this year.
Inflows into mutual funds were also quite moderate in size, at R25bn, of which R15bn went into local equities. So local inflows into equities totalled $600mn.
Corporates, meanwhile, sold $250mn worth of stocks in two placements in June. These numbers suggest that the remaining $350mn was sold by foreign investors.
The number of retail brokerage accounts continued to grow, but the growth started to decelerate, which may indicate early signs of saturation. Less than 500,000 new accounts were opened, the lowest number in a year.
Stock-level data suggests that retail investors continued to increase their exposure to Gazprom and Surgutneftegaz prefs while further reducing their investments in Lukoil. VTB and MMK entered the top 10, displacing Yandex and Severstal.
Russia’s ruble denominated MOEX Russia Index set a new all time high record after it crossed the 3,900 mark on June 6.
The dollar denominated Russia Trading System (RTS) index was also rising and reached 1,678.42 points as of 10am on the same day.
The two indices have returned 13% and 14.6% YTD – their highest levels in about four years. The index collapsed following Russia’s annexation of Crimea in 2014. The RTS index, preferred by international investors that account for about half of all the investment into the equity market, remain range bound until 2018, trading between circa 900 and 1,300.
As the recession finally began to recede in 2018 the RTS broke out above 1,300 and rose to around 1,600 by the start of 2020. But then the multiple shocks of that year knocked it back.
As the economy starts to recover this year so have the two indices. A cooling of geopolitical tensions following the Geneva summit on June 16 between US president Joe Biden and Russian President Vladimir Putin has added to the momentum, as has the rise of oil prices to over $75.
One of the key themes in June was the introduction of a 15% export duty for steel, iron ore products, nickel, copper and aluminum, which is to be effective from 1 August until YE21. Separately, the CBR increased its key rate
97 RUSSIA Country Report August 2021 www.intellinews.com