ALFA Morning Bulletin: 28 May 2021

  • Reflation trade returns
  • Banks lead rally in Russian equities
  • Russian stocks to benefit from rotation into cyclical stocks

Reflation trade returns: Markets were mixed yesterday with European indexes and the Russian market pushing higher – RTSI (+0.8% @ 1,603) and IMOEX (+0.7% @ 3,738). Banks and metal producers led the charge supported by the reflation trade. The ruble edged higher (+0.05% @ 73.50) in part against a weaker US dollar. The Chinese yuan was traded at a 3-year high of CNY6.37, which is supportive of metals in particular. Oil prices drifted lower before finding a second wind in late trading (Brent +0.9% @ 69.46) as traders contemplate the possibility of Iranian oil coming to the market if sanctions are lifted from Tehran.

Russian stocks to benefit from rotation into cyclical stocks: The Russian market is poised for gains today as investors globally rotate into cyclical stocks. US President Joe Biden is set to unveil a budget that would increase federal spending to $6 trillion in the coming fiscal year. The administration is also expected to reveal how inflation, employment, and economic growth would be affected by enacting his agenda. Anticipation of that has provided a boost to market sentiment and the reflation trade. The MSCI Semi-Annual rebalancing takes place after the bell tonight. We note that substantial passive inflows can be expected for POLY, NLMK and OZON.


Polyus 1Q21 IFRS results: in line with consensus – NEUTRAL

Lukoil 1Q21 IFRS results conference call highlights

HeadHunter reports strong 1Q20 top-line trends, upgrades 2021 guidance, announces 2020 DPS of $0.55/share – POSITIVE

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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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