Market comment
As expected, Russian equities continue to trade sideways with IMOEX (-0.2%) largely flat in the absence of meaningful triggers. Sberbank (-0.5%) posted solid numbers, but the management’s comments spoiled sentiment in the stock. Stable weakness in the rouble, fluctuating around 76 against USD, brings additional buying interest to the M&M sector with MMK (+1.7%) and Mechel (+2.7%) among the top performers. However, weakness in Brent (-1%) is the key constraint for a further rebound in O&G, without which the index is likely to fail in attempts to break through 2300 resistance
The OFZ market was directionless on Thursday with changes to yields within 5bp and notable activity in only a few issues. Papers of series 26223 (7.67%, 2024) led turnover, with the yield rising 5bp. Issue 26241 (10.47%, 2032) was also actively traded. Today the market will most likely remain neutral and quotes will see limited changes
In focus
Macroeconomics – CBR analyst survey: Improved GDP forecast, USD/RUB downgraded – GDP is expected to fall 1.1% in 2023, inflation to reach 6% – we expect almost flat GDP and 7.5% inflation: above consensus
News in brief
Macroeconomics – Volume of incoming payments through CBR rose m/m in February – volume was 11.4% higher than the 4Q22 average – growth was seen in all industries (highest in investment demand) – supports our above consensus forecast for flat GDP in 2023
Oil producers – Urals trades at just a $16/bbl discount to Brent in west coast ports of India (Argus) – ESPO and Sokol blends were sold at $70-75/bbl (fob) to Asian markets at Far East ports – indicates that average export selling price of Russian producers is above the oil price cap – improved logistics efficiency should bring an additional $10/bbl by mid-2023 – positive
