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Russian stock market may fall sharply closer to autumn



The US Treasury Department has banned American companies from buying on the primary market bonds issued after June 14, 2021 by the Central Bank, the NWF, or the Russian Ministry of Finance. In addition, the US has now officially recognized the link between Russia and the hacker group APT29 (also known as Cozy Bear and The Dukes). Plus, those European companies that are owned by 50% or more of investors from the US will not be able to buy the national debt. The gun has been hanging on the wall for a long time and, finally, it went off. The ban on purchases on the primary market is more of a reputational blow; US players can participate in the secondary market. The reaction in the foreign exchange and stock markets was sluggish. This scenario has been in prices for a long time. And of course, the main thing for the Russian budget is oil prices. On April 14, the Russian Ministry of Finance held a record placement of OFZs. Investor demand for 7-year and 10-year bonds with constant coupon yield reached RUB 510 billion. RUR 170.73 billion was raised on 7-year securities. (66% of demand) at a rate of 7.08% per annum, for 10 years – 213 billion rubles. (85%) at a rate of 7.23% per annum. Investments of non-residents in OFZs currently amount to 20%, or $ 35-40 billion, of which 1/3 is the share of American investors. These investors are outside the sanctions. The loss of potential American investors will not significantly affect the budget and economy of Russia. The question is how the situation will develop further. US President Joe Biden on April 13, during a telephone conversation, invited Vladimir Putin to hold a face-to-face meeting and negotiations to discuss all issues of bilateral relations. In 15 minutes, the dollar rate swooped down by more than a ruble and for the first time in a week went below the level of 76 rubles. Markets believed in a decrease in geopolitical tensions and a reset in relations between the two countries. At current oil prices, the dollar exchange rate should be below 70 rubles. What is more to be feared than sanctions? The anti-crisis measures of US President Joe Biden should reset the American economy and, of course, give investors money. However, according to information from the business community, a new rise in the American stock market, as a result of which the DJIA index is approaching 34,000 points, the NASDAQ is quoted at about 14,000 points, and the S & P-500 broke a record level of 4,000 points, is the result of the PR proclaimed by Joe Biden “the great infrastructure plan “worth $ 2.35 trillion. April 13 during a telephone conversation. But if you divide this amount by 10 years provided for the implementation of the plan, then this year the allocated funds will be clearly insufficient. In the summer of 2021, after the end of the tax season and the publication of corporate reports for the last year and the first quarter of this year, a correction of the stock market is expected. , which may well develop into a sharp fall by autumn. Naturally, this will apply to emerging markets, oil and, accordingly, Russia. The banquet continues, the main thing is to leave the table when the bill arrives. It may be worth selling everything except the SNGSP, dividends are the best insurance against devaluation. Well, cash will find its use in the form of dividends, purchases of Lukoil, Gazprom Neft or some other interesting assets .________________________ Alexander Razuvaev, Head, IAC Alpari

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