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May 31, 2019 www.intellinews.com I Page 2
Russian stocks to hit record highs in 2019 say analysts
of 2020, it is seen at 1,225, with forecasts ranging from 1,050 to 1,500.
The ruble-based MOEX index has also been setting new record highs and has also returned more than 10% YTD. Analysts forecast the MOEX index will reach between 2,220 and 2,950 by the end of this year, its highest level ever.
While economic growth in the first quarter disappointed, coming in at 0.8%, well below the consensus forecast, at the company level the leaders in most sectors are doing well and reporting both strong sales and profits as the process of consolidation continues.
Moreover, the owners are returning these profits to investors in the form of some of the highest dividend yields in the world. Russia is just com- ing into the dividend season as these are paid out over the summer months, and investors are taking their bets, buying into their favourite names ahead of record dates that entitle shareholders to receive dividends. ING estimates that some RUB2 trillion ($30.6bn) will be distributed as dividends this year.
“We estimate that 31% of this sum, or RUB0.6 trillion, could potentially be converted into FX, an equivalent of about $9bn. July is the heaviest month in terms of payments, with 40% of the total sum, including 34% of FX portion, due,” Dmitry Dolgin, ING’s chief economist for Russia, said in a note.
The fear of new US “crushing” sanctions on Russia is fading and as the US economy cools that is pushing investors back into emerging markets as they become “risk on” again. However, analysts warn that unpredictable and large shocks are still possible and could pull the rug out from under the market’s feet.
Russian Market Data Value
1M YTD
Equity Indices
RTSI
1,287
3%
20.3
MOEX
2,660
4%
12.2
MSCI EM
995
-8%
3.0%
S&P
2,789
-5%
12.0%
NASDAQ
7,568
-7%
15.0%
DAX
11,902
-4%
13.0%
FTSE
7,218
-3%
7.0%
Commodities
Price, $
1M YTD
Brent
66.7
-8%
23%
WTI
56.6
-11%
25%
Urals
74.2
-4%
65%
Gold
1,289
0%
0%
Silver
14.5
-3%
-6%
Nickel
11,975
-3%
13%
Copper
5,822
-10%
-2%
Aluminum
1,762
-3%
-6%
FOREX
Value
Russia sectors performance % YTD
1M YTD
EUR/RUB
72.48
0%
-9%
Russia sectors performance % YTD
Oil & Gas Utilities Financials Consumers Telecoms
M&M RTS MOEX
17
22
19
20.3
14
16
7
12.2
0 5 10 15 20 25
Source: MOEX, BCS GM
source: MOEX, BCS GM
Sectors: % return YTD