Page 73 - RusRPTFeb22

As part of the investor update, management stated that TCS Group “remained on track to reach and exceed the 2023 Strategy ambitions”.
We view TCS Group’s investor update as marginally positive in the current environment due to both geopolitical tensions and the already high market expectations for its performance.
TCS Group’s statements on the high trading activity of its retail brokerage clients also support our positive view on MOEX, whose fundamentals are set to visibly benefit from the combination of high volatility and rising ruble interest rates.
8.2 Central Bank policy rate
CBR governor does not see global inflation dropping, implying upgrades during February meeting. On Friday, 14 January, CBR Governor Elvira Nabiullina participated in a panel at the Gaidar Economic Forum on policy prospects in the short term and mid-term. On monetary policy, Nabiullina stressed that higher inflation in Russia and globally could remain due to “a radical change in trends” that existed before COVID-19 and are returning now. Nabiullina’s statements could have a direct impact on CBR’s mid-term outlook, which is expected to be updated during CBR’s policy meeting on 11 February, in our view. As a result, we do not rule out a significant upgrade to CBR’s YE22 inflation outlook from 4-4.5% to 5.5-6% or an additional 100bps hike during next month’s meeting.
According to Nabiullina, the Russian economy faces three challenges: a tight labour market featuring a deficit of low-skilled and high-skilled workers; motivating private investors and their matureness to take on risk from holding companies’ equity; and an energy transition that is creating high uncertainty around CBR’s outlook and is making returns for private investors less visible, with PPPs being the best option.
73 RUSSIA Country Report February 2022 www.intellinews.com