This web site is a property of TKB Investment Partners (LLC).
This material is produced for information purposes only and does not constitute: 1. An offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. Any investment advice. Opinions included in this material constitute the judgment of TKB Investment Partners (LLC) at the time specified and may be subject to change without notice. TKB Investment Partners (LLC) is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted. Please note that different types of investments, if contained within this material, involve varying degrees of risk and there can be no assurance that any specific investment may either be suitable, appropriate or profitable for a client or prospective client’s investment portfolio. Given the economic and market risks, there can be no assurance that any investment strategy or strategies mentioned herein will achieve its/their investment objectives. This material shall not be considered as any kind of a guarantee or a promise of the future effectiveness (profitability or break-even) of investment activity. Results of investments in the past shall not be considered as a guarantee of such results in future. All past performance date have documental confirmation. There are no guarantees of profits or returns from financial instruments unless otherwise clearly indicated in respective prospectus. Returns may be affected by, amongst other things, investment strategies or objectives of the financial instrument(s) and material market and economic conditions, including interest rates, market terms and general market conditions. The different strategies applied to the financial instruments may have a significant effect on the results portrayed in this material. The value of an investment account may decline as well as rise. Investors may not get back the amount they originally invested.
The performance data, as applicable, reflected in this material, do not take into account the commissions, costs incurred on the issue and redemption and taxes.
TKB Investment Partners (LLC) is the legal entity registered under laws of the Russian Federation with the principal state registration number (OGRN) 1077847028280, having its registered address at: 69/71, lit. A, Marata street, Saint-Petersburg, 191119, Russia.
Russian equities rose last week despite the drop in the price of oil. The surge of optimism on global markets helped Russia to end the week in the black. This optimism was mainly due to improved investor sentiment surrounding the hope that Sino-US trade tensions could soon ease.
Benefiting from global optimism
Week
YTD
RTS Total Return (TR) in USD
3.3%
3.6%
MOEX index TR in RUB
Composite
3.7%
18.8%
Blue Chip
3.8%
22.8%
Small and mid-cap
2.3%
-13.2%
MOEX sector index TR in RUB
Consumer Goods
4.2%
-11.1%
Financial Services
3.3%
-12.0%
3.1%
13.9%
Oil & Gas
2.3%
43.6%
Power Utilities
2.0%
-4.0%
FX
RUB/USD
-0.2%
-12.7%
RUB/EUR
-0.7%
-7.6%
Data as of November 2, 2018
Sources: TKB Investment Partners (JSC) calculations; Bloomberg
Russian equity market dynamics
Russian equities rose last week despite the drop in the price of oil. The surge of optimism on global markets helped Russia to end the week in the black. This optimism was mainly due to improved investor sentiment surrounding the hope that Sino-US trade tensions could soon ease.
The consumer goods sector outperformed the market. This was mainly due to Yandex’s stock value rebounding, and gains for the stocks of retail chain companies, X5 and Magnit. The news that Yandex could change its governance structure appears to have reduced investor fears that the management could lose control over the company.
The power utilities sector lagged the other market sectors. Some utilities stocks contracted despite the overall positive trend in the market. There were no news to justify the weaker performance.
Main Russian news
Russia advanced to 31st place in the World Bank’s ‘Doing Business’ rating. Last year it was in 35th place and seven years ago in 120th position. The largest improvement was in dealing with construction permits, for which Russia leapt from 115th to 48th. This was mainly due to two factors: the time period for passing through all the formal procedures related to construction shrank to 192- 194 days from 230-260 days and the building quality control index rose to 14 from 10 (15 is the maximum value of this index). The Minister of Economic Development, Maxim Oreshkin, said that some of the 2017-2018 reforms were not taken into consideration as they were not fully completed by 1 May. With these reforms completed, Russia could rise to 18th place, according to his estimates.
Author: Egor Kiselev, Head of International Business & Investment Marketing
To watch...
VEON and Alrosa are due to publish their Q3 financial results. Rosstat is going to publish inflation figure for October.
Sources: Vedomosti, Interfax, TKB Investment Partners (JSC); as of November 2018
Quarterly results: Actual vs. consensus for EPS, adjusted (US dollars)*
* based on Bloomberg consensus
TBA – to be announced
Source: Bloomberg, TKB Investment Partners, data as of November 2, 2018