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The Russian stock market is in no hurry to give up before the holidays



Last Friday, the Russian stock indices MosExchange (+ 0.29%) and RTS (0.00%) completed the main trading with a slight change in relation to the levels of the previous close. At the end of the evening session, the Moscow Exchange (IMOEX2) index rose by 0.29%. Such a modest one-day deviation of these stock indices looked quite natural, since the local stock market was almost completely isolated from the influence of the external background. This was associated with the celebration of Catholic Christmas in many countries around the world. Trading turnover on the Moscow Stock Exchange has noticeably and naturally decreased. However, this did not cancel the speculative movements in individual securities. Let us add that the medium-term technical picture in the Moscow Exchange and RTS indices remained practically unchanged at the end of Friday trading. She remains positive. As for the so-called “Christmas rally”, this year, from a formal point of view, it has not yet taken place. In the second half of December, the Russian stock market is no longer growing. But it has risen markedly since mid-November, which is unlikely to change radically in the incomplete trading week ahead of the upcoming New Year. In any case, the movements in the “thin” market in the remaining days of December will no longer be indicative. At the close of the Friday evening trading session, the March futures on the RTS index (RIH1) came to a state of insignificant backwardation of 2.6 p. Or about 0.2% in relation to basic indicator. Derivatives market participants maintain a close to neutral assessment of the medium-term prospects of the RTS index. Against the background of a moderate increase in the Moscow Exchange index during the day and evening trading sessions, the most liquid stocks closed with a moderate multidirectional deviation within 1-3%. Significant movements in individual securities were mostly associated not with meager corporate news, but with speculative and technical factors. The most noticeable trend of the day was the continuation of purchases in liquid shares of steel companies: NLMK (NLMK RM, + 2.07%), MMK (MAGN RM , + 2.90%), Severstal (CHMF RM, + 3.19%). Apparently, the interest in them is associated with the suspension of the medium-term growth in the value of oil futures. This encourages investors and speculators to “shift” from oil and gas securities to shares of enterprises belonging to other export sectors of the Russian economy. An additional factor of support for NLMK securities was the fact that on Friday they were trading with dividends for 9 months of 2020 on the last day. Their value will be 6.43 rubles. per share, or about 2.9% of the closing price. Along the way, it should be noted that the fixation of short-term profit took place in securities of Mechel-JSC (MTLR RM, -0.76%), Mechel-up (MTLRP RM, -1.58%). In the second half of last week, these shares rose in price without an obvious informational reason. Most likely, we observed in these securities another surge of speculative activity characteristic of them. By the way, Mechel’s common shares on Friday came out on top in terms of turnover among shares on the Moscow Exchange. In Detsky Mir shares (DSKY RM, -2.84%), fairly large-scale chaotic movements continue. They were thrown off balance by the recent unexpected offer to buy back 25% of these securities at a price of 160 rubles. apiece from the investment company Altus Capital. Let us remind you that earlier Detsky Mir was briefly left without a dominant shareholder after AFK Sistema exited its capital from the trading network. And on Friday it became known that the Cypriot Onexim Holdings Limited of Mikhail Prokhorov became the owner of 5.35% of the shares of PJSC Detsky Mir. The shares of MAIL-gdr (MAIL RM, + 2.14%) had a corrective rebound from the recent five-month low. In the second half of the year, investors and speculators lost interest in them, despite the fact that Mail.ru is a representative of a promising and growing IT sector. In a broader sense, one cannot but be alarmed by the fact that Mail.ru’s receipts this year are traded at lower levels than in 2011-2014. From a technical point of view, they are more suitable for medium-term speculation than for investing. This morning, US stock index futures are showing a noticeable increase in value in the range of 0.4-0.6%. Brent crude oil contracts fell 0.4%. Gold futures gained 0.5%. China’s Shanghai Composite Index rose 0.1%. Japanese Nikkei225 added 0.6%. The state of the external background before the start of trading in Russia can be described as ambiguous. This creates conditions for the opening of the Moscow Exchange index with a restrained deviation. We expect the opening of the Moscow Exchange index with a restrained deviation within 0.1-0.3%, in the range of 3235-3255 p. The levels of 3230, 3220 p will act as the nearest support for it. Significant resistance will be the marks 3270, 3280 p. After a close to neutral start of trading, the Moscow Exchange index is likely to go into a state of consolidation. This is facilitated by a mixed external background this morning, with no major foreign macroeconomic indicators scheduled to be released today. Therefore, in the second half of the day, participants in local trading will habitually focus on the dynamics of oil futures and the nature of the opening of the US stock market .__________________ Vitaly Manzhos, Senior Risk Manager, IC Algo Capital

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