The Moscow Exchange index opened with a gap down yesterday, reflecting weekend profit-taking at the talks between the leaders of Russia and the United States. Nothing interesting happened until the evening, and the market remained below. By the end of the day, the Moscow Exchange Index lost 2%.
The situation improved dramatically in the evening trading, after information appeared about US President Donald Trump's talks with Zelensky and Western leaders. Very quickly, the daily drawdown was bought out, the gap was closed, and on Monday the market grew by 1.5%. At the same time, the turnover of the evening was higher than that of the afternoon trading.This morning, the rise continues, the indicator is trying to climb above 3,000 points. In general, we believe that cautious purchases, especially on drawdowns, are appropriate. Geopolitics has begun to improve, and the likelihood of a solution to the Ukrainian problem, and possibly the lifting of some sanctions, is growing. Consolidation above 3,000 points will pave the way for an assault on the weak resistance of 3,050 points, and if successful, for the closure of the February gap in the area of 3,190 points.
Yesterday, the shares of Aeroplane (+2.5%) and PIKA (+2.2%) were better than the market, which often react to changing conditions at a faster pace than the market. Some people flatter themselves with hopes for the emergence of new government mortgage programs. But we are not one of them. Firstly, the state of the budget is not very good for new investments right now. Secondly, to launch programs like preferential mortgages is to step on the same rake, that is, to provoke an increase in housing prices with a corresponding rise in inflation, and in fact to siphon public funds into the pockets of developers. Therefore, we recommend trading developers' securities only speculatively.
St. Petersburg Bank was disappointed (-3.3%), which reported a 58% YoY drop in net profit in July. This happened due to the formation of reserves, which can also be quickly dissolved in the future. The medium-term trend on paper remains upward. Fundamentally, we look at the bank positively, including due to the low cost of funding and high dividends. Therefore, we recommend buying when the stock is declining.
Everything is predictable in the foreign exchange market. The ruble weakened 0.7% against the yuan on Monday, and the pair confidently gained a foothold above 11.1, which has now become a support. We do not think that an improvement in geopolitics will lead to a strong strengthening of the ruble. There are practically no large speculators on the foreign exchange market who could buy the ruble, for example, in anticipation of a hypothetical influx of non-resident funds into OFZs. Although it is possible that the yuan-ruble pair will test support today.
Alexey Antonov, Head of Investment Consulting at ALOR BROKER
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