Russian equity market dynamics
Last week, Russian equities moved in line with the broader emerging markets (EM) index. The Russia-specific factor contributed to the market’s relative performance mainly due to the advance in index heavy-weight Yandex (‘Russian Google’). The company announced it planned to buy Tinkoff bank for USD 5.5 billion. The market welcomed the news. The deal is likely to allow Yandex to significantly improve the financial services part of its ecosystem. However, the sector factor outweighed the positive impact of the Russia-specific one.
Main Russian news
The Ministry of Economic Development expects GDP to start rising already in 2021. In its base case scenario, it forecast a 3.9% contraction in 2020, 3.3% growth in 2021 and a 3.4% increase in 2022. In a more conservative scenario, the ministry expected growth of 2.7% in 2021 and 2.9% growth the following year. This scenario would reflect the prolonged slowdown in economic activity in the sectors affected most by the pandemic, according to the report. The conservative outlook assumed a USD 43-45/bbl price of crude oil in the medium term due to weak oil demand. In the base case scenario, this figure was higher – USD 46-48/bbl.
Author: Aleksandra Kuznetsova, Junior Investment Specialist
Sources: Rosstat, Vedomosti, Bloomberg, TKB Investment Partners (JSC); September 2020