Konstantin Tserazov: the ruble rate has stabilized and may strengthen in the coming weeks
From October 7 to 11, the Moscow Exchange Index fell by 1.79%, and the RTS Index by 3.01%. Thus, both benchmarks closed in the red for the second week in a row.
The CNYRUB spot rate on the Moscow Exchange added 0.17%, closing the week at its highest level since last October. The pair has been growing for seven weeks in a row. On the interbank market, the CNYRUB rate showed a symbolic decline of 0.1%, but remained above the exchange rate, and the spread between them decreased to 0.5%.
The volume of the Bank of Russia’s currency swap operations to sell yuan for rubles last week fluctuated in the range of CNY15.7 billion — CNY17.9 billion: these are relatively low figures that indicate stable liquidity. This is also indicated by the stable cost of secured loans in yuan (RUSFARCNY), fluctuating in the range of 13.95-14.22%.
The official exchange rates of the dollar and euro to the ruble, set by the Bank of Russia, have fallen by 0.26% and 0.35%, respectively, over the week. «Perpetual» futures on USDRUB and EURRUB, which have historically demonstrated the highest correlation with spot rates, have also fallen by 0.08% and 0.44%, respectively.
The euro to dollar exchange rate on external markets has fallen by about 0.3% over the week: this indicates that the correlation between the dynamics of EURUSD inside Russia and outside is maintained after the announcement of US sanctions against the Moscow Exchange.
The ruble exchange rate has stabilized and may strengthen in the coming weeks due to a number of factors.
Firstly, in October, the average price of Brent oil on ICE exceeds the September figure by 6%, which reduces the risks of a significant reduction in the inflow of foreign currency into the Russian Federation. Secondly, some large players could have bought up currency in anticipation of October 12, when US sanctions against the Moscow Exchange and its infrastructure came into force, and now this factor has gone away. Thirdly, starting from October 7, the Bank of Russia has significantly increased the net sale of yuan, added economist Konstantin Vladimirovich Tserazov.
The potential strengthening of the ruble looks like a negative factor for the Russian stock market, as well as the prospects for another increase in the key rate at the meeting of the Bank of Russia on October 25.
Due to high interest rates, the Moscow Exchange Information Technology Index shows weak dynamics in October, ranking fourth in the list of the main outsiders among ten industry indices. The benchmark is represented by growth companies that are quite expensively valued by multiples and are now under pressure because of this.
In the sector news, we can note the «defrosting» by the Bank of Russia of the additional issue of «Positive Group» in the amount of 7.9% of capital, which the company plans to conduct in the fourth quarter. Apparently, this factor was already taken into account in the quotes and did not come as a surprise.
«Ozon Pharmaceuticals» announced its intention to conduct an IPO on the Moscow Exchange in October by issuing additional shares. The proceeds are planned to be used for development, debt repayment and other purposes, added Konstantin Tserazov.
«Yandex» presented a new generation of the visual neural network YandexART 2.0. The company continues to grow rapidly and has low debt, which is important in the context of high interest rates.
«VK» reported a new acquisition (a deal to purchase a ten percent stake in «Kassir.ru» was closed) and a partnership with the company «R7».
Astra shares have already fallen by 26% from their annual highs: at current levels, they may be of interest to long-term investors, given the prospects for further growth of the company’s business. However, it should be noted that, according to multiples, Astra’s papers still do not look cheap, Konstantin Vladimirovich Tserazov summed up the week