Morning Note /

Alfa Morning Bulletin: 15 April 2021

  • Russia rallied as geopolitical risks ‘eased’

  • Russian stocks advanced in a broad rally with gains concentrated in cyclical stocks

  • Russia faces imminent sanctions threat

15 April 2021
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Russia rallied as geopolitical risks ‘eased’: Russian equities built on Tuesday’s rally on optimism that a summit between Presidents Biden and Putin can lead to a normalization of relations between Washington and Moscow – RTSI (+2.2% @ 1,490) and IMOEX (-1.4% @ 3,550) – with cyclical stocks leading the climb driven by strong Chinese macro data and higher oil prices. The ruble also advanced (+0.3% @ 75.70) enjoying an ‘easing’ of geopolitical tensions and higher oil prices. Crude quotes were boosted by an upgraded demand outlook from the IEA (Brent +4.6% @ 66.58).

Russia faces imminent sanctions threat: There is a change of fortunes for Russian stocks and the ruble this morning, with the US reported to be set to announce sanctions this evening, that may include restrictions on US entities purchasing Russian sovereign debt from the primary market. We anticipate a broad selloff today in Russian equities and a sharp depreciation of the ruble – at least until the extent of the sanctions are clarified. Apparently, US entities will be allowed to trade Russian sovereign debt (OFZ) on the secondary market – again clarification of this may provide some relief.

Key news

Sanctions on Russian sovereign debt could take effect on 14 June – Negative

PhosAgro announced a final dividend of RUB 63/ordinary share – Positive

MMK 1Q21 trading update: Seasonal steel sales decline amid stable crude steel output and rising prices – Neutral

Gazprom Board recommends RUB12.55/share in dividends – Positive