Russian Equities Weekly 09–13/09/2019: New talks over dividend pay-outs

  Week YTD
RTS Total return (TR) in USD 2.1% 35.2%
MOEX index TR in RUB    
Composite -0.2% 24.3%
Blue chip -0.7% 26.1%
Small and mid-cap 0.8% 12.2%
MOEX sector indices TR in RUB
Power Utilities 4.2% 30.3%
Financial Services 0.7% 25.8%
Consumer Goods 0.1% 13.3%
Metals & Mining -0.2% 11.9%
Oil & Gas -0.3% 19.2%
RUB/USD 2.0% 7.4%
RUB/EUR 1.4% 11.1%

Data as of September 13, 2019
TKB Investment Partners (JSC) calculations; Bloomberg

Russian equity market dynamics

For the fourth week in a row, the Russian equity market outperformed other emerging markets (EM). The RTS gained 2.1% while MSCI EM index rose by 1.9% (all figures in USD terms). The strengthening rouble and expectations over higher dividend pay-outs by state-owned enterprise (SOE) subsidiaries supported the Russian market.

The power utilities sector outperformed the market. This was mainly due to Inter RAO and Rosseti, whose shares rose by 12.6% and 7.7%, respectively, in rouble terms. The sharp increase in the stocks of these companies was triggered by the Ministry of Finance’s proposal to extend a mandatory 50% pay-out rule to SOE subsidiaries.

The oil and gas sector was the worst performer of the week, dragged down mainly by Novatek, Rosneft and Lukoil. There was no news to justify the sector’s poor performance.

Main Russian news

Rosstat published GDP data for the second quarter and first half of 2019. In Q2 2019, economic growth in Russia reached 0.9% YoY. This figure confirmed the previously published preliminary assessment. The largest growth was seen in mining, transportation and financial sectors. In the first half of the year, GDP grew by 0.7% YoY.

To watch…

Rosstat is due to publish industrial production and key macroeconomic figures.

Author: Marina Tsutskiridze, Junior Investment Specialist

Sources: Vedomosti, Rosstat, Bloomberg, TKB Investment Partners (JSC); August 2019

Russian Equities Weekly 16 September 2019
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