Market Outlook


The Russian equity market edged into the black last week, mainly thanks to oil prices rising and positive sentiment around the US-China trade talks. Oil prices continued to be supported by the OPEC+ supply cuts agreement and the US sanctions on Venezuelan exports. Expectations of positive results from the US-China talks supported global markets overall: the MSCI EM index gained 2.8% and the MSCI World rose by 1% in US dollar terms.


Talk of fresh sanctions triggered profit-taking in Russian equities, ending a five-week run of outperformance against emerging market peers.


After five consecutive weeks of growth, the Russian equity market has somewhat corrected. Globally, investors were most likely fixing their profits after a healthy year-to-date performance.


The Russian equity market edged into the black last week. Global markets rose as well: the MSCI EM index gained 1.7% and the MSCI World rose by 1.4% in US dollar terms. The partial recovery in crude oil prices and the official lifting of US sanctions on Russian public companies supported investor sentiment.


The Russian equity market continued to rise, along with other emerging markets: the MSCI EM index also gained 1.4% in US dollar terms over the week. In contrast, MSCI World rose only marginally by 0.1%. Overall, as of 23 January, emerging markets equities saw an inflow of USD 3.1 bln, which was a second consecutive week of inflows above USD 3bln. Among that, net inflow into the Russian market over the most recent week was USD 135 mln, mainly through the GEM-funds.


The Russian equity market remained in the black for third week in a row as global markets continued to recover: the MSCI EM and MSCI World indices rose by 1.7% and 2.3%, respectively, in US dollar terms. The Russian equity market continued to outperform other emerging markets thanks to rising oil prices and optimism over a possible easing of sanctions.


The Russian equity market rose strongly over the first two weeks of the year, outperforming both the MSCI EM index (+3.7% in USD) and the MSCI World index (+4% in USD). Higher oil prices and the possibility of sanctions easing in the near term helped Russian equities to outperform their peers.


Global equity markets came under pressure again last week. As a result, the MSCI World and MSCI EM indices fell by 5.5% and 1.5%, respectively, in US dollar terms.

Russian equities in US dollar terms underperformed those of emerging markets. Investors continued to take profits, mainly in oil and gas stocks, as the price for Brent crude oil fell by 11.2% in US dollar terms. On the other hand, there was some positive news that likely supported investor sentiment towards the Russian market. The US Treasury department is due to terminate sanctions against Russian public companies (please see next page for more details).