Morning for domestic investors again turned out to be difficult. At the opening of trading, the Moscow Exchange Index went down by more than 9%, to the level of 2000 points. This level has long been called the strategic goal of the decline by most analysts. Therefore, it is not surprising that as soon as the indicator touched the “round” mark, large-scale purchases began on the market.
However, such a sharp decline was largely due to low market liquidity in the first minutes of trading, as well as large-scale triggering of stops and margin calls.
It is worth noting that today’s speech by Vladimir Putin did not lead to any unexpected, unpredictable statements from the West. Yes, Europe has again started talking about the need for new sanctions, but many European politicians themselves admit that there is no longer anything to “punish” Russia, and attempts to push through any marginally tough decisions will most likely be blocked.
Largely due to this, the Russian stock market began to rebound, having managed to win back a third of the maximum losses: according to the results of the main trades, the Moscow Exchange Index closed down by 3.8%.
Low-liquid shares of companies focused on the domestic market closed with a slight increase today. Exporters have grown into one of the world’s largest titanium producers, VSMPO Avisma, as well as PhosAgro, companies whose likelihood of imposing sanctions against them is close to zero — the West cannot do without their products so far.
VSMPO shares look fundamentally very attractive now. First, both Europe and the United States recognize that there is nothing to replace the supply of Russian titanium in the coming months. Secondly, expectations of a sharp rise in the Russian aviation industry indicate that demand for Avisma products will also grow in the domestic market.
In general, the situation is that those who wanted to sell shares have already done so. Now it is the turn of the buyers, including large institutional ones, who at these prices can begin to form long-term portfolios.
As for the bulls, a reason is needed to revive them. Perhaps this reason will be the improvement in the situation on world stock exchanges – if the Fed does not present unpleasant surprises today. For example, it will not announce a rate increase by 1 percentage point at once, which has not been observed for forty years.
However, analysts warn that despite the high probability of a rebound, the scenario of a fall to the area of February lows, which is below 1700 points on the Moscow Exchange Index, cannot be ruled out. Therefore, purchases should be approached with caution: not only not to use “shoulders”, but also to have free money to average the portfolio in case of another sharp decline.
The exchange rate of the Russian currency early in the morning fell by 2.5%, going to the area of 62.8 rubles. per dollar. However, this was due to the fact that large players enter the market only at 10:00 Moscow time. As soon as they turned on the trading terminals, speculators who tried to play against the ruble were forced to close their positions at a loss. Many exporters, who need to pay taxes to the budget in the coming days, considered the exchange rate to be higher than 62 rubles. per dollar sufficient to solve their problems and increased the sale of foreign exchange earnings.
As a result, at the end of the day, the ruble exchange rate practically did not change. The dollar on the Moscow Exchange on Wednesday evening costs a little less than 60.7 rubles.
Things are more serious in the bond market: the Moscow Exchange Government Bond Index fell to the area of May values, and at the end of the day, investors bought out only half of the drawdown. In total, today the indicator has lost a very significant 2.13% for it, and over the past 3 days – almost 4.5%.
In this market, the Ministry of Finance of the Russian Federation declared the OFZ-PD auction invalid today, since there were no bids at prices acceptable to the financial department. This is absolutely not scary for the budget – the Ministry of Finance previously did not plan to resume the placement of new issues of its obligations at all.
Now 2-4-year OFZs are traded at a yield of about 8.5% per annum, and with maturity in 5 years or more – above 9.5% per annum. Thus, buying OFZs has once again become much more profitable than keeping money in bank deposits.