Last week, the Russian equity market rose slightly, while other emerging markets (EM) remained almost flat. Global markets holding their breath in anticipation of US-China trade deal news as uncertainty around the negotiations increased amid talks that completion of “phase one” may be delayed until next year. The Russian market’s outperformance was driven by Gazprom’s share price rising during the week. The stock gained 3.1% on Thursday on the back of the company’s SPO.

  Week YTD
RTS Total return (TR) in USD 0.4% 45.4%
MOEX index TR in RUB    
Composite 0.4% 32.8%
Blue chip 0.6% 36.2%
Small and mid-cap 0.6% 12.9%
MOEX sector indices TR in RUB
Power Utilities 1.0% 26.6%
Financial Services 0.5% 30.2%
Consumer Goods 0.4% 9.3%
Metals & Mining -0.2% 12.8%
Oil & Gas -0.4% 32.2%
FX    
RUB/USD -0.2% 8.4%
RUB/EUR 0.0% 12.7%
Data as of November 22, 2019
TKB Investment Partners (JSC) calculations; Bloomberg

Russian equity market dynamics

Last week, the Russian equity market rose slightly, while other emerging markets (EM) remained almost flat. Global markets holding their breath in anticipation of US-China trade deal news as uncertainty around the negotiations increased amid talks that completion of “phase one” may be delayed until next year. The Russian market’s outperformance was driven by Gazprom’s share price rising during the week. The stock gained 3.1% on Thursday on the back of the company’s SPO.

The power utilities sector outperformed the broader market. This was mainly due to MOESK (a subsidiary of Rosseti), whose shares rose by 11.3%. The company is considering paying an interim dividend for the first nine months of 2019.

The oil & gas sector was the worst performer of the week, dragged down mainly by Novatek and Rosneft, whose shares lost 1.9% and 1.1%, respectively, despite a lack of fundamental news to explain the falls.

Main Russian news

Key macroeconomic indicators were mixed in October. The weakness in industrial production growth was due to a sharp deterioration in extraction sector growth. The acceleration of growth in retail sales was felt in both food and non-food segments. Since September, Rosstat has started publishing data on real wages with a one-month delay, only after receiving organisation’s data. Preliminary estimates will no longer be submitted.

Indicator Growth YoY
September 2019 October 2019
Industrial production 3.0% 2.6%
Manufacturing 3.2% 3.7%
Extraction 2.5% 0.9%
Retail sales 0.7% 1.6%
Food 0.4% 1.3%
Non-food 1.0% 2.0%
Real wages 3.1% not available

To watch…

There is no significant news to follow this week.

 

Author: Marina Tsutskiridze, Junior Investment Specialist

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

Russian Equities Weekly 25 November 2019_SL
Categories: Market Pulse