Russian equity market dynamics
Last week, the Russian equity market outperformed the broader emerging markets by 2.3%.
This was mostly due to the difference in the two indices’ sector structures. The Russian market was mainly supported by its overweight in the energy sector, which rose by 2.8% in the EM index. Additionally, the absence of the IT sector in the Russian index contributed positively to the relative excess return, as the sector fell by 5% in the EM index.
|MSCI Russia 10/40 TR in USD||0.9%||23.0%|
|MSCI EM index TR in USD||-1.4%||-1.8%|
|Due to Russia specific factors*||0.1%||11.1%|
|Due to difference in sector structure*||2.2%||13.6%|
|MSCI EM HDY index TR in USD**||-0.6%||6.1%|
|* See details of methodology at the end of the report
**MSCI Emerging Markets High Dividend Yield Index
*** We use Brent Oil and LBMA Gold price data, in USD terms. Energy weight in the MSCI Russia 10/40 is 35%; gold producers’ weight in the index is 8% (as at the end of August 2021)
Data as of 1 October 2021
TKB Investment Partners (JSC) calculations; Bloomberg
|Upside/downside to fair price||10%|
|Data as of 1 October 2021
TKB Investment Partners (JSC) calculations
Main Russian news
Russia’s key macroeconomic indicators were mixed in August. Industrial production increased on an annualised basis in both the manufacturing and extraction segments but at a lower rate than in July. Retail sales strengthened both relative to the previous month and on an annualised basis, mainly thanks to an acceleration in food purchases. Rosstat published real wage growth data for July which showed an increase of 2.2% YoY.
Key macroeconomic indicators, YoY dynamics
|July 2021||August 2021|
|Real wages||2.2%||Not available|
*Data updated by Rosstat
Rosstat is due to publish inflation figures for September 2021.
Author: Aleksandra Kuznetsova, Investment Specialist
Sources: Vedomosti, Bloomberg, TKB Investment Partners (JSC); October 2021