Morning Note /
Russia

Alfa Morning Bulletin: 16 November 2021

  • Russian stocks and the ruble bounced back

  • Attempt for China-US reset instills some confidence in market sentiment

  • Confidence returns to the Russian market

Alfa
16 November 2021
Published by

Russian stocks and the ruble bounced back: The Russian market rebounded on Monday – RTSI (+0.4% @ 1,791) and IMOEX (+0.3% @ 4,135) – from a geopolitical-driven selloff late last week. Albeit an early rally in foreign-listed DRs petered out as the session progressed. The ruble also regained strength (+0.5% @ 72.55) as perceived geopolitical tensions ease. At this point, we do not see signs that sanctions risk against Russia has increased. Oil prices pared losses to close flat (Brent -0.1% @ 82.05).

Confidence returns to the Russian market: Russian equities are extending gains this morning as a measure of confidence returns and geopolitics takes a back seat. The reflation trade should get a boost from Biden’s signing of the $1.0 tn infrastructure bill and that in turn should be supportive of Russian cyclical names. Attempts at reset between the US and China following yesterday’s call between the two leaders has boosted the Chinese yuan this morning and, in theory, that provides reasons for optimism on the global trade front and consequently world markets. A stronger oil price this morning provides a tailwind for Russian assets, particularly energy stocks. The ruble is extending yesterday’s gains.

KEY NEWS

Nabiullina hawkish in her speech to the Russian parliament yesterday – NEUTRAL

Lenta (O/W): BoD approves dividend policy – MODERATELY POSITIVE

HeadHunter 3Q21 results: top line 7% above forecasts, adj. EBITDA margin at a record 60%, 2021 growth guidance lifted by 18pp – POSITIVE

MTS 3Q21 financials preview

Segezha Group’s BoD approves a RUB0.42 in 2020-9M21 DPS, 4% yield – NEUTRAL

RusAgro: Reports solid 3Q21 IFRS numbers; CEO change from 1 January – POSITIVE