Russian equity market dynamics
Last week, the Russian equity market outperformed the broader emerging market (EM) index by 2.2%. This was mainly due to a country-specific factor. Investor sentiment rose ahead of the upcoming summit between the Russian and US presidents, which is scheduled for 16 June. Optimism was heightened after Vladimir Putin gave a pre-summit interview to NBC, his first interview on US media in three years.
Main Russian news
The Central Bank of Russia (CBR) hiked its key rate by 50bp to 5.50%. This was the third increase in a row. The move was explained by higher-than-expected inflation as the economy is recovering faster than the regulator had forecast. According to CBR chairman, Elvira Nabiullina, the Russian economy has already recovered to pre-crisis levels and is continuing to grow. The regulator also noted that it foresees that further increases in the key rate may be required at upcoming monetary policy meetings. The CBR expects inflation to return to its target level in the second half of 2022.
To watch…
A summit meeting between the presidents of Russia and the US is due this week.
Author: Marina Tsutskiridze, Investment Specialist
Sources: Rosstat, Bloomberg, TKB Investment Partners (JSC); June 2021