On Wednesday, the Russian stock market tried to develop a rebound and gain a foothold above 2,750 points on the Moscow Exchange index. However, continued pressure from the geopolitical factor and a significant recovery in the ruble, which contributed to sales in the shares of exporters, led to a resumption of negative stock market dynamics. Sales prevailed until the end of the session, as a result of which the Moscow Exchange index lost 1%, ending the session at around 2,720 points.
The outsiders of trading were shares of Rusal, Polyus and Norilsk Nickel, which adjusted by 3.3%, 2.8% and 2.8%. These securities looked noticeably better than the market in previous sessions, which allowed Polyus securities to update historical highs on Tuesday, and Norilsk Nickel to reach its highs since April, however, the ruble's transition to growth and the correction in precious metals signaled the beginning of profit-taking on these securities. Despite the correction, in our opinion, these stocks continue to be interesting over the medium term – companies can benefit from further price increases for precious metals, as well as from the weakening of the ruble in the medium term. According to our estimates, the target prices for shares of Norilsk Nickel and Polyus over the 12-month horizon are 165 and 2.39 thousand rubles, respectively.
The securities of Kamaz (+14.8%) and Sollers (+5.7%) showed better market dynamics, which could be supported by the decision of Rosstandart, which, according to media reports, suspended the admission of some Chinese truck models to the market. They were accompanied by shares of VK (+3.5%) and Lenta (+2%).
Today, the Russian stock market may continue to decline and retreat to the lower limit of our target range of 2,700 – 2,750 points, which is the closest support for the Moscow Exchange index. The pressure on Russian stocks will continue to be exerted by the geopolitical factor, the low ruble price of oil, as well as investor uncertainty about the trajectory of the key rate cut.
Bogdan Zvarich, Head of Banking and Financial Market Analysis at PSB
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