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Non-residents dump Russian stocks on bounces – ForTrader.org financial magazine

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Domestic investors yesterday continued to buy back shares that had sagged on Monday. But they did it very sluggishly. Not only did the Moscow Exchange Index rise yesterday by only 0.5% against the US and by far more than a percentage of European indices that added 0.8%, but also the turnover of trading decreased. Yesterday, a little more than 50 billion rubles were traded in the Moscow Exchange Index, which is one third less than the average level.

The oil industry looked weak, despite the fact that yesterday oil soared by more than 5%, and again went above $ 70 per barrel. There were no particular reasons for the growth of oil quotations, just as there were no reasons for its collapse by more than 6% on Monday. Moreover, the US Department of Energy, for the first time in 8 weeks, announced an increase in oil reserves by 2.1 million barrels, while the market expected a decrease of 4.5 million.

Even more frightening is the decline against a good background in the shares of Sberbank and Norilsk Nickel, in which non-residents invest the largest share of their assets. One gets the impression that foreign investors are slowly leaving ruble stocks, selling them on bounces.

Another negative was the rise in OFZ prices. Yields on government securities are now very chocolatey in the face of vague prospects for the stock market, and the flow of funds to the debt market is quite justified. If tomorrow the head of the Central Bank Elvira Nabiullina gives a hint that in the future the rate will not grow aggressively, then the flow of money into bonds may intensify.

Among the positive moments, it is worth noting the final clarification of the issue with Nord Stream 2: Germany and the United States have agreed! This pulled up Gazprom’s quotes by 2%. We believe that Gazprom will not stop, and it may well conquer the mark of 300 rubles, even in a flattening of the Mosbirzhi Index.

MMK and NLMK are to publish their Q2 reports today. It is possible that after the event someone will start fixing profits, but the securities should not sink much, with their quarterly dividend yield over 4%, medium-term investors will not get rid of the shares.

In general, today the external background can be characterized as neutral. American futures added a symbolic 0.1%, metals are traded in different directions, oil loses a third of a percent, dropping to $ 72 per barrel. If the situation on the western grounds does not improve dramatically, then it will be difficult for the Russian stock market to continue the rebound, given the lack of a pronounced desire to buy.

The ruble rose yesterday against the dollar, which is a consequence of the tax period and increased demand for OFZs. The pair finished the day at 74, which is not a very strong support. This morning the ruble has been trying to build on its success, and it is possible that it will succeed.

However, buying the ruble against the dollar is dangerous, even speculatively. It is better to wait for Friday, when the Central Bank will announce its plans for its monetary policy, wait for the pair to turn upwards and join the devaluation movement of the ruble.

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