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The Moscow Exchange Index may continue to move towards the upper border of the side corridor

The Russian stock market was able to grow today, ignoring the increase in sanctions risks after the last G7 summit. recovered from the morning drawdown, managing to end the day above the 2400 mark. The index was supported by papers of the financial sector, as well as by higher depositary receipts.

Among the key segments, the financial sector grew stronger than others, led by Sberbank (MCX:) and VTB (MCX:). Shares of the largest Russian banks have been growing for almost two weeks. In our opinion, investors believe that the main sanctions shock for Sberbank and VTB is behind us, and lower mortgage and loan rates are fueling interest in securities.

Shares of the oil and gas sector did not show any significant dynamics. In this sub-segment, only Bashneft’s (MCX:) shares that rose in price stood out. Let’s single out again the shares of Gazprom (MCX:), the value of which has stabilized after a pullback due to the possible introduction of a premium to the MET. We believe that until the AGM, where shareholders will finally decide on dividends for 2021, the company’s papers will be close to 295-300 rubles.

But the sector of mining and metallurgy became an outsider due to the fall of the shares of Norilsk Nickel (MCX:) and gold miners. Shares of Polyus (MCX:), Polymetal (MCX:) and Seligdar fell due to a possible ban on imports of gold from Russia to the G7 countries and the EU. We would like to note the receipts of Petropavlovsk, which at the same time added more than 8%. This is probably due to the fact that papers have fallen more than other gold miners up to this point. The loss of Petropavlovsk’s receipts since the beginning of the year exceeded 81%, while the shares of Polyus and Polymetal decreased by 22% and 67%, respectively. The situation with Seligdar is somewhat different, the company’s shares have fallen in price by only 13% since the beginning of the year. This is due to the fact that Seligdar has a high potential for organic growth in the coming years. In addition, the company mines not only, but also tin.

Among other securities, we highlight the strong growth of consumer sector depository receipts. Sollers (MCX:) also jumped on positive corporate news.

In our opinion, if the Moscow Exchange index fixes above 2400 points, it may continue to move towards the upper border of the side corridor, which is at 2450 points.

About author

Oxford graduate with honors. He worked in large financial projects for well-known Wall Street corporations. After he earned his first capital and a reputation as a successful trader, he opened his own company. At the moment, the growth of the company's capital is 20% per year.
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