Page 113 - RusRPTApr21

2m21. Money market and FX volumes started the year fairly sedately, with low- mid single digit growth y/y, more or less as we expect, but derivatives seem to be continuing their stellar showing from last year and are up 32% y/y, with growth driven primarily by a strong rise in FX derivatives. Average ruble client balances dropped back quite strongly in February, falling 17% m/m, while dollar and euro balances were up 11% and 2% m/m in original currency terms.
Russian retail investors back in the market and buying. Moscow Exchange has published retail investor statistics for February. Retail investors bought RUB29.5bn (nearly $400mn) in Russian stock, a touch higher than the previous month's RUB28.5bn, Sberbank CIB said in a note.
These two months have only offset half the outflow seen in November, when RUB151bn was sold to institutional, primarily nonresidents, Sberbank reports.
As bne IntelliNews reported the number of Russian retail investors investing into stocks has grown rapidly in the last years as the interest rates on bank deposits – the traditional store of wealth for most Russians – has fallen into the single digits and the reappearance of inflation has shrunk the margins on these investments to next to nothing.
Retail investors have invested 85% of their money into Russian stocks, with the rest invested into international names, and now account for about 40% of the daily turnover on Moscow Exchange (MOEX).
Mutual fund inflows picked up from the previous RUB28bn to RUB37bn (nearly $520mn). Sberbank analysts estimate one third of this figure was directed into stocks.
Institutional data from EPFR Global indicates some $442mn came into Russia in the first three weeks of the month. Combined with the retail and Russian fund data, this may indicate that less-tracked fund categories - e.g. hedge and sovereign wealth funds - were on the selling side. However, the available institutional data also does not yet include the market's weak last week of February.
The number of brokerage accounts grew at the fastest pace (9%) in four months, reaching 10.4mn in February. Active accounts (those making at least one trade a month) climbed to over 1.6mn, a pace in line with the account openings.
Noticeable adjustments in the top 10 stocks in the aggregate portfolio this month included a 3.2 pp gain for Nornickel, a 3.1 pp cut for Sber commons, and a 1.3 pp decline for Mail.ru Group.
Nornickel was among the market's weakest performers price-wise, with a 2.7% decline in February versus the RTS's 6.1% gain. Hence, this continues the trend of the retail portfolio taking up recent underperformers, Sberbank reports.
“Also significant was the appearance of Polymetal in the top 10 with 7.1% - it had not made the top 10 previously, and was another February underperformer price-wise, having dropped more than 8%,” Sberbank analysts sai.
“Exiting the top 10 was VTB - it had been in 10th place in the portfolio for two
113 RUSSIA Country Report April 2021 www.intellinews.com