Morning Note /
Russia

Alfa Morning Bulletin: 31 March 2022

  • Russian stocks and ruble extend gains

  • European and US stocks on the back foot – oil prices tumble

  • Russian stocks and ruble closing out the month and Q1 with strength

Alfa
31 March 2022
Published byAlfa

Russian stocks and ruble extend gains: Russian stocks continued to regain ground on Wednesday – RTSI (+7.7% @ 949) and IMOEX (+4.3% @ 2,513) – with strong growth across the board. Exporters in the commodity sectors led the advance. But we also note strong gains in telecoms (MTSS, VEON), retailers (MGNT, FIVE) and AFLT. Tech names were also well bid, including QIWI, HHRU, OZON and VKCO. The ruble continued to strengthen versus the US dollar (+0.8% @ 84.55) and the euro (+0.1% @ 94.15). Oil rebounded from a two-day slide (Brent +2.9% @ 113.45) as traders saw hopes for de-escalation slip away.

Russian stocks and ruble closing out the month and Q1 with strength: Geopolitical uncertainty and concerns over rising inflation and tighter monetary policy have dominated market sentiment in March as a tumultuous month and first quarter draw to a close today. An inverted US yield curve is flashing the risk of recession. Globally, US and European stock futures are mixed this morning although they are in an upward trajectory in overnight trading ahead of the last trading day of the month and quarter. Investors in the US are awaiting weekly jobless claims and personal income and spending data later today. Tomorrow sees the release of the monthly US jobs report. Russian equities have opened with further gains this morning with strong growth across the board sectorwise. The IMOEX is on track to close March with a 5% gain and the RTS is set to close the month flat. The quarterly picture is showing losses of about 30-35% for the main Russian indexes. The ruble continues to strengthen and touched 74 vs. the US dollar this morning before easing back to 80.75/US$ or a 7.75% gain. The Russian currency is up 1.6% @ 91.70 against the euro.

KEY NEWS

Unemployment rate decreased to 4.1% in February, a historical low – POSITIVE

Inflation at 6.6% MTD as of 25 March – MIXED

NLMK continues exports to the EU and US

Polymetal provides sanctions impact update