Tellimer

Alfa Morning Bulletin: 21 September 2020

  • Markets closed last week lower lacking catalysts
  • Russian stocks closed the week in red – industrial metals and utilities saw some demand
  • Russia unlikely to withstand the downdraft from global uncertainty

Market Wrap

Markets closed last week lower lacking catalysts: Markets worldwide, including Russian stocks, slipped lower last Friday – RTSI (-1.2% @ 1,228) and IMOEX (-0.7% @ 2,952) – frustrated by a lack of catalysts after the Fed failed to deliver on expectations at the FOMC meeting last week and with no signs of fresh stimulus from the US. The ruble conceded ground (-0.7% @ 75.73) to a strengthening US dollar. Oil prices pulled back from the previous session’s highs (Brent -0.6% @ 43.15). European markets also closed week on the back foot (StoxxEuro600 -0.7%).

Russian stocks closed the week in red – industrial metals and utilities saw some demand: Russian stocks closed last week on a downtrend, with gold names the main laggards – POLY LN (-6.3%), particularly hit after the main shareholder sold a 4% stake via ABB, and POGR RX (-5.0%). RUAL RX (+3.2%), EVR LN (+2.2%) and ALRS RX (+1.6%) were well bid in the metals & mining sector. Utilities slightly outperformed led by HYDR RX (+1.2%) and FEES RX (+2.9%). MAIL LI (+1.1%) was an outperformer in the tech sector.

Markets remain weak lacking fresh catalysts: Wall Street closed last week on a negative note dragged lower by tech stocks in a volatile session ahead of the quadruple witching – S&P 500 (-1.1%), DJ (-0.9%), NASDAQ (-1.1%). Asian markets are trading lower this morning and closing the session with weakness as conviction remains fragile – NIKKEI (closed), Hang Seng (-1.6%), CSI 300 (-0.8%), KOSPI (-0.9%), ASX 200 (-0.8%). Japan is closed for a holiday. Oil prices are back under pressure (Brent -0.4% @ 42.93). The yuan is trading stronger this morning (CNY +0.2 @ 6.758) on the expectation that Chinese government bonds will be added to the FTSE Russel index. A decision will be taken on Thursday.

Russia unlikely to withstand the downdraft from global uncertainty: The Russian market can be expected to open the week lower as the downdraft from market uncertainty and a lack of conviction among investors continues to pressure global equity markets. Investors are waiting for developments on US stimulus, as well as progress on vaccines amid a major resurgence in Covid infections across Europe. Asian markets closed sharply down this morning and oil prices are under pressure.

Key events today: There are no major events or announcements scheduled for the Russian market or economy today.

Key Stories

August retail trade disappointed with 2.7% y/y decline, unemployment rate increased to 6.4% level; NEGATIVE

The CBR kept its policy rate unchanged at 4.25%; NEUTRAL


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