Market Outlook


Global equity markets declined last week, with the MSCI World and MSCI EM indices dropping by 1.7% and 3.1% respectively in US dollar terms.


The Russian equity market rose last week, supported by a 2.9% upswing in oil prices in USD terms. As a result, oil and gas companies contributed the most to the overall market performance. Oil prices were supported by EIA data that showed a fall in US crude oil inventories and lower oil exports from Iran.


The Russian equity market rose by 1.1% in USD terms last week supported by oil prices, which in rouble terms reached new absolute highs of more than RUB 5 000 per barrel. Comments from the Russian central bank regarding the pause in currency purchases until the end of September also helped the market’s performance in USD terms.


The Russian equity market declined last week as the price of Brent crude corrected downward by 1.5% in US dollar terms on the back of the US Energy Information Authority (EIA) reporting an unexpected increase in US crude stockpiles. In addition, some pressure might have come from the continuing discussions in the US Congress of sanctions against Russia and from the broader emerging market sell-off.


The Russian equity market fell last week, mainly on the back of the news flow related to the new US sanctions against Russia. This was likely an overreaction given that the sanctions, which were imposed on August 8th and in fact do not disclose much information about the measures being taken, will likely apply restrictions only on US exports of national security items to Russia. Thus, this does not directly involve any public company or their ability to conduct business and generate cash flow for shareholders. Another drag on the equity market was the new tax proposal for metal and mining companies, which was suggested by presidential aide, Andrei Belousov.


The Russian equity market was muted last week, with results in rouble and US dollar terms diverging due to differences in exchange values. The price of Brent crude oil supported the market as it increased by 1.5% in USD terms, while discussions in the US Congress about new sanctions against Russia put some pressure on the market in the second half of the week.


The Russian equity market ended last week in the black, mainly supported by positive investor sentiment in reaction to the strong second quarter 2018 financial results from many Russian companies. Higher oil prices supported the positive mood, as the price for Brent crude rose by 1.5% over the week in US dollars terms. The oil price rise was partly due to the news that China plans to accelerate its economic growth by increasing its investment in infrastructure, which in its turn could boost demand for some commodities, including oil.


The Russian equity market fell last week as the Vladimir Putin and Donald Trump meeting in Helsinki did not produce the hoped-for results. The meeting was followed by new discussions in the US Congress about potential sanctions against Russia for alleged US presidential election meddling, which aggravated investors’ concerns.