Page 116 - RusRPTJan21

“Aggregate USD-based net income in 2021 is expected to rise by 52%, thanks primarily to the earnings rebound in the energy names. The bottom-up RTS consensus index target stands at 1625, 15% upside and a Hold.
Moscow Exchange registered record monthly outflows from retail brokerage accounts in November.​ Individuals sold R116bn ($1.5bn) worth of Russian stocks during the month. This number suggests massive inflows from foreign investors.
The numbers for November represent a departure from the trend seen over the last two years. However, the retail outflows are easy to explain. Vaccine-induced optimism has prompted global investors to start picking up cyclical assets, including Russian stocks. The RTS Index jumped 23% in November. For every buyer there needs to be a seller, so local investors appeared on the offer side. We estimate foreign inflows at $2.5bn during the month, as retail investors were not the only sellers: there was also a $1bn IPO. Overall, this development is good news for the market, as foreign purchases leave local retail investors with plenty of cash that they can deploy at any moment.
The number of retail brokerage accounts continued to expand rapidly and now exceeds 8mn. This has further increased the capacity for local investors to buy more stocks.
Some $5.6bn (0.37% of sampled AUM) came into EM equities in the week to December 2, following a similar sum the previous week, according to EPFR Global data. GEM funds saw $2.2bn (0.28%) inflow, following the previous week's $2.4bn. China saw the bulk of the inflow at $3.5bn (0.46%) this week and $3.9bn the week prior. EM equities have seen inflow of nearly $25bn in the last four weeks, bringing their YTD outflow down to $17.9bn, or 1.4% of initial AUM.
Russia saw net inflow of $133mn (0.26%), versus $156mn the week prior. That broke down to $81mn via GEM funds, $49mn (0.52%) from Russia-dedicated funds and $22mn (0.32%) from global funds. Europe, EMEA and BRIC funds withdrew a combined $20mn. Russia has seen four consecutive weeks of net inflow. EPFR data now show Russia with $1.7bn outflow YTD, equivalent to 2.6% of AUM.
In the reporting week, the RTS gained 2.6% versus a 0.9% rise for the MSCI EM.
116 ​RUSSIA Country Report​ January 2021 www.intellinews.com