In line with the consensus forecast, based on expectations of analysts, indexes MICEX and RTS per week will increase by 0.5% and 1.3% respectively. The price of Brent crude oil will grow by 2.5 dollars, to 47.2 dollars per barrel.
MOSCOW, 13 Nov. Dmitry Mayorov, Elena Likova. Analysts of investment companies and banks expect next week growth of the share market of the Russian Federation and the appreciation of the ruble against the Euro and the dollar, according to data of the survey conducted.
In line with the consensus forecast, based on expectations of analysts, indexes MICEX and RTS per week will increase by 0.5% and 1.3% respectively. The price of Brent crude oil will grow by 2.5 dollars, to 47.2 dollars per barrel, and the Euro-dollar exchange rate will remain at about 1.07 dollars. The ruble against the dollar will increase by 40 cents against the Euro and 28 cents analysts are expecting.
In anticipation of the fed rate hike
Correction in the markets caused by expectations of a rate hike by the fed after the release of the news on the labor market in the U.S. last Friday, will not be the beginning of a new downward trend, and now it is nearing completion, said Vasily Tanurcov from “Veles Capital”.
Regarding oil, the current situation, despite the continued growth stocks, yet it looks more optimistic than in August, when it was installed a minimum of mark Brent to 42 dollar a barrel, he said. In addition, the decline in oil production in the U.S. will sooner or later be resumed, which will be an occasion to growth of quotations of black gold, said the analyst.
Reign in the markets correctional moods amid fears of a fed rate hike in December on the background of good statistics on the US and declarations of the representatives of the American regulator also notes Eugene Loktionov from PSB. In his opinion, the negative sentiment in markets will continue next week, where we get consumer inflation in the US and the UK (Tuesday) and the meeting minutes of the US Federal reserve.
The movement of indices
The MICEX this week shows weakness following the weak global markets, but still looks relatively good because of low insurance premiums and mid-term optimism of the market participants, providing selective demand for “chips” (Sberbank, Gazprom) and relative stability, despite the weak ruble, stocks 2-3 levels, said Eugene Loktionov from PSB.
“Unfortunately, to talk about the frontal purchases in the near future without the recovery of oil prices to 47 dollars per barrel is difficult. We believe that the market has entered a period of turbulence, but it can on the MICEX index be limited to a reasonable drawdown, we see two areas of support is strong, in our view, 1685-1705 points,” he commented.
The main reason a moderate negative factor for the Russian stock market — the decline in oil prices and, as consequence, decrease in buying activity from investors and increased sales, said analyst Nordea Bank Valery Yevdokimov. However, the technical look at the current decline of the MICEX index in such market conditions, and analogy with the behavior of the market in the recent past suggests that the market has a chance to stabilize in the forecast week, he said.
On the Russian stock market, apparently, will continue the intrigue around the area 1735-1740 on the MICEX, believes managing Director of the network of the Bank “BCS Premier” Sergei Danilov. “Here is the upper bound of the medium-term sideways trend. If you rely on technical analysis, while the quotes above are stored upstairs 1735, goals 1795-1810 relevant. If the MICEX index will fall below, the situation will deteriorate considerably”, he says.
According to BCS analysts, the steady growth of the Russian stock market can occur only on the background of the ruble’s accelerated devaluation. Other fundamental reasons for a revaluation of assets is not observed, adds Daniel.
The stock market will drift in a narrow range in conditions of uncertainty regarding the future trajectory of monetary policy tightening in the US, said the Director of analytical Department of investment company “Region” Valery Weisberg.
“Six members of the Committee on open market operations by the fed on Thursday voted for a rate hike in December, however, the market still provides only a 70% probability of this event. Such divergence will be a source of additional volatility in the coming weeks,” he commented.
Hope ruble and oil taxes
The beginning of the tax period, even in conditions of falling oil prices will support the ruble, said Valery Vaisberg of the IC Region.
In the coming week, the dollar may return to the hall 61-65 rubles, provided that the price of oil will rise to 48 dollars per barrel and above, said Georgy Vashchenko from IR “freedom Finance”.
“We expect the stabilization of world oil prices and the return of the pair dollar-ruble in the 63-65 zone,” — said Sergey Danilov from the Bank “BCS Prime”.
However, there are also negative forecasts. Despite the decline in oil prices, the ruble showing some stability, said Roman Tkachuk from “Pragmatics”.
“The indicator of the oil price in rubles fell to 2950 — a very low budget level. If the oil prices will bounce up, the ruble will inevitably continue to weaken. This month, in light of the massive external repayments until year-end, exporters can hold the conversion of foreign currency earnings for tax payments”, — warns Vladimir yevstifeev of Bank Zenit.
Among the leaders of growth may be shares of the following companies: “Uralkali”, “Enel Russia”, MTS, says Evdokimov from Nordea Bank. On the price charts of these actions are visible signals technical oversold levels, which indicates increased potential for growth in the near future, he explains. “For investors that have short positions in these securities, there is a technical reason to take profits,” adds the analyst.
The largest decline can be shares of the following companies: Aeroflot, MegaFon, Moscow exchange, says Evdokimov. “Although the shares of “Aeroflot” has grown in recent weeks and stabilised at the reached levels, they remain technically “re-bought”. The shares of “MegaFon” and the Moscow stock exchange recently reached the levels of technical “overbought”, which increases the likelihood of reducing them,” — says the expert.
Eugene Loktionov from PSB short-term rates as very attractive just resold MTS shares, which price is unreasonably below the 200 rubles, and also the prefs of Surgutneftegas, is capable of a weak rouble to return to the area 45-47 rubles. “But on the whole, is to refrain from active actions before the consolidation of the MICEX index below or above 1690 1750 points or exhaustion of the bearish movement in oil,” he notes.
The most interesting stocks with a close date of closure of the register and with a good dividend yield (LUKOIL, MegaFon, Norilsk Nickel), says Andrey Vernikov of “Zerich capital Management”. “The most likely driver of growth of the MICEX index and devaluation. In this regard, especially interesting commodity stocks with large export opportunities,” he adds.
Better the market will be investments in the commodity sector, as it largely protects investments against depreciation of the ruble, believes Georgy Vashchenko of “freedom Finance”. The financial sector can demonstrate negative dynamics, if the ruble strengthens, moreover, the ordinary shares of Sberbank look re-bought in the short term, it does not exclude the correction of 4-6% on the horizon of a week, he adds.
The upcoming week in focus reporting MTS, VTB and “Dixie”, reminds the analyst. “Shares of MTS, most likely, will stop the fall. The driver can be the dividend, the expected return for the year is more than 11% vs the current quotes. Reporting VTB less will affect the market, because the earnings forecast for 2015 remains a conservative, expectations of participants of the market assume that it will be, but will not exceed last year’s level,” he explains.