Stock market starts week down despite key rate cut

Director of Strategic Projects at BCS World of Investments Dmitry Kashaev:

— Buy ​​a rumor, sell a fact. The Central Bank has lowered the rate, but has not softened its speech. There are no additional positive stories on the market, so there is such a local fixation and a transition again to the money market and bonds. We continue to prefer bonds among our investment stories.

— What is happening with the ruble, how can we explain the dynamics of our currency now?

— I think that the main story about the ruble will unfold next week, when the St. Petersburg International Economic Forum begins and stories related to settlements in national currencies or in the ruble itself will be discussed. And this will probably be reflected in some dynamics. For now, the ruble is in a wait-and-see position, although for our budget it is, of course, too expensive.

— Oil prices were falling at first, but now they are going up. What are the forecasts for the oil market?

— This week, oil will be affected by possible negotiations between China and the United States. Despite the fact that there was a telephone conversation between the leaders of the two countries, demand is still unclear. However, our oil is highly supported by such a trader mood that buying Russian energy resources is not as scary as it may seem at first, and it is unlikely that those 500 percent secondary duties will be applied.

Director of the Wealth Management Department of AF Capital Management Company Ruslan Klyshko:

— The market continues the dynamics of the second half of the day on Friday. We are seeing the manifestation of the classic principle "Buy on rumors, sell on facts". The fact is that in the run-up to the Central Bank's decision on the rate, we have been seeing growth in both OFZ and the stock market for almost seven days in a row. Many were stocking up on positions, gaining additional leverage. That is, in fact, the market has already priced in the decision to lower the rate. Therefore, on Friday, immediately after the rate decision, we saw a "candlestick" decrease of 5%, and in some rate-sensitive companies with a large level of debt, the decrease was even greater. In addition, this movement was reinforced by a neutral, closer to tough, signal from the head of the Central Bank following the meeting, suggesting the possibility of raising the rate if inflation starts to grow. We believe that in the medium term, the Central Bank's signal to ease monetary policy is certainly positive for the stock market. Perhaps we are not talking about the coming days, but for weeks - for sure. The week is short, so some investors are inclined to limit liquidity for participation in the stock market. However, the medium-term outlook is rather positive.

— There was an interesting episode on the currency market: the June dollar futures lost more than 7%. True, it almost immediately recouped the losses, but such a sharp drop was also on the dollar with a longer expiration date — what was that?

— We believe that this is a more technical factor, that is, the positions quickly recovered. In general, high rates encourage businesses and the population to save in rubles. This understates both consumer demand and import volumes accordingly. Therefore, we do not believe that the current reduction in the key rate will seriously affect the dynamics of the ruble exchange rate. We do not expect to see a serious decline in the near future.

— What is happening in the oil market now?

— Today, trade talks between the US and China will be held in London. Investors are paying attention to this. That is, if we see a significant recovery in exports from China and the US, this will support oil prices. In addition, there are statements from OPEC+ countries, mainly from Saudi Arabia, about a possible increase in production from July. But the market is ignoring this data for now, so we see a slight increase.

Asset manager of the International Private Investment Fund Alexander Dushkin:

— Double effect: the peace process is going rather unclearly, and the interest rates set by the Central Bank ultimately depend on the peace process, on geopolitics. The Central Bank is clearly lagging behind, since they are difficult, by the way, to understand in this situation, because the Central Bank should have noticed that the strengthening of the ruble brings a cooling of inflation expectations, a cooling of inflation, and reacted to this. But it does not react to this, and this causes bewilderment and the impression that the team needs some kind of, apparently, rereading of textbooks at the very least. The stock market hopes that there will be a reduction in the interest rate, but now it is already summer — time to think about something for tomorrow, but not to be actively involved. The summer market is not for this.

— Okay, what about the ruble? Right now there seems to be a slight increase, but what are the prospects for the Russian currency?

— It’s not about the ruble, it’s all about the dollar. The most important factor that is currently influencing all currencies in the world is that investors are aware of the volatility of the US foreign and domestic policy. So far, they have not been able to cope and reach an agreement with large holders of government bonds — they have no results with either the Japanese or the Chinese. Therefore, they are in a rather difficult situation. Capitalizations were overvalued, and now the States are faced with an amazing situation of a strong capital outflow. I think this will last for a long time. I think that a great time has come for all currencies in general, except for the dollar, and I think this will last for a long time. That is, it’s not the ruble that has become better in recent quarters, but the dollar has become significantly worse in the eyes of investors. And American investors joke that they look at the dollar today, remembering the ruble of 1998. Such jokes have even appeared.

Director of Financial Markets and Macroeconomics Analysis at F-Broker Alexander Timofeev:

— The market doesn’t care whether it’s 20% now or 21%, but when we will actually see more adequate values. I mean, when we will see values ​​of at least 10-13%, so that we can talk about growth in the stock market at all. Accordingly, unfortunately, we have not heard this from the Central Bank. Therefore, some small correction is quite logical. The Russian market has been in correction, probably, since the February highs simply because there is no positivity — neither in geopolitics, nor in the promotion of the track with Ukraine, nor in relation to sanctions. And note: in the context of the new sanctions package, we are still discussing not whether they will be in general, but exclusively how strong or weak they will be. Therefore, against the backdrop of all this, frankly speaking, negativity, against the backdrop of the fact that we still have the dividend cutoff season and we remember that at the end of the week, for example, there was a cutoff for Tatneft, after which it was adjusted relative to dividends... Here I am afraid that in the near future there will be no positive developments on the Russian market, and it will be good if we see such small corrections.

— Regarding the ruble: today we see a slight increase against the yuan, and the day before, the West once again recognized the ruble as the effective currency of this year. And, as CNBC wrote with reference to Bank of America data, the Russian currency continues to strengthen, despite geopolitics, falling oil prices and tough anti-Russian sanctions. What is the ruble’s strength, since it was recently predicted to decline?

— Until the decree on the obligation to sell foreign currency proceeds was extended in April, it became clear that the government would manage the ruble in the most manual mode possible. That is, at any moment Gazprom could be required to sell up to 100% of all the currency it received, for example, within a week. And against the backdrop of this absolute weapon, against which there is no salvation, it seems that the market sees no reason for the ruble to weaken in any way now. Moreover, against the backdrop of the fact that it has consolidated below 80, and against the backdrop of the fact that rates are still high, it seems that this value is adequate at least for the summer.