Russian Equities Weekly 4-8 January, 2021: Off to a good start

Russian equity market dynamics

Last week, the Russian equity market rose in line with the broader emerging markets (EM) index. The markets followed the global rally amid expectations of more US stimulus following Joe Biden’s announcement that he is assembling a multitrillion-dollar COVID-19 relief package.

  Week YTD
MSCI Russia 10/40 TR in USD 4.7% 4.7%
MSCI EM index TR in USD 4.8% 4.8%
Excess return -0.1% -0.1%
Due to Russia specific factors* -0.2% -0.2%
Due to difference in sector structure* 0.1% 0.1%
Key commodities**
Oil 9.1% 9.1%
Gold -1.3% -1.3%
RUB/USD -0.1% -0.1%
RUB/EUR -0.9% -0.9%
* See details of methodology in the end of the report

** Energy weight in the MSCI Russia 10/40 is 34%, Gold producers weight in the index is 9% (weights are as at the end of December 2020)

Data as of 8 January 2021

TKB Investment Partners (JSC) calculations; Bloomberg

Upside/downside to fair price -3%
Data as of 8 January 2021
TKB Investment Partners (JSC) calculations

Main Russian news

According to Rosstat’s preliminary data, inflation in Russia accelerated to 4.9%YoY at the end of December from 4.4% YoY at the end of November. The most significant increase within the consumer price index (CPI) was in the food segment, rising to 6.7% YoY in December from 5.8% in November, while non-food inflation rose to 4.8% YoY from 4.5%.

OPEC+ agreed to extend the current level of oil production cuts for February and March 2021. At the same time, special conditions were agreed for Russia and Kazakhstan, which will increase their oil production by 65 000 bbl/day and 10 000 bbl/day, respectively. Saudi Arabia, meanwhile, said it would voluntarily cut its production by 1 million bbl/day from January’s levels. The quotas of other OPEC+ members are to remain unchanged.


Author: Marina Tsutskiridze, Junior Investment Specialist

Sources: CBR, Vedomosti, Bloomberg, TKB Investment Partners (JSC); January 2021

Russian Equities Weekly_11 January 2021
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