Russian Equities Weekly 15-19/04/2019

23.04.2019

The Russian equity market ended in the black for the third consecutive week, outperforming its peers. The MSCI World index rose by 0.1% and the MSCI EM index gained 0.3%, in US dollars terms. A rise in oil prices continued to support the Russian market.

Oil jump optimism


Week 

YTD

RTS Total Return (TR) in USD      

0.6%

18.3%

MOEX index TR in RUB

Composite

0.2%

8.5%

Blue Chip

0.1%

10.1%

Small and mid-cap

0.9%

5.6%

MOEX sector index TR in RUB

Consumer Goods

1.5%

4.7%

Power Utilities

1%

8.9%

Metals & Mining

0.8%

3.3%

Oil & Gas

0.4%

3.4%

Financial Services

-0.1%

11.5%

FX

RUB/USD

0.5%

8.1%

RUB/EUR

0.7%

10.3%

Data as of April 19th, 2019
Sources: TKB Investment Partners (JSC) calculations; Bloomberg



Russian equity market dynamics


The Russian equity market ended in the black for the third consecutive week, outperforming its peers. The MSCI World index rose by 0.1% and the MSCI EM index gained 0.3%, in US dollars terms. A rise in oil prices continued to support the Russian market.

The consumer goods sector outperformed other sectors last week, driven by positive operational results of the X5 Retail Group and M.Video in Q1 of 2019, boasting 15.3% and 12% revenue growth respectively.

Financials underperformed last week due to Sberbank and VTB, whose share prices fell by 2.9% and 1.3% respectively.



Main Russian news


Russian macroeconomic indicators worsened in March. Industrial production growth decelerated due to slower growth in both the manufacturing and extraction sectors. Retail sales growth also decreased to 1.6% YoY. This slowdown was felt in both food and non-food segments. From this year onwards, real disposable income is provided only quarterly. In Q1 of 2019, the indicator decreased by 2.3% compared with the same period last year. The reason for this deterioration was the slowdown in real wages growth. Rosstat published for the first time the real disposable income calculated by this new method, and recalculated the indicator for 2018. The new calculation showed that there was an increase in income of 0.1% last year, as opposed to the fall of 0.1% calculated by the previous method.

 Indicator       Growth YoY
       February 2019      March 2019
     Industrial production      4.1%      1.2%
     Manufacturing      4.6%      0.3%
     Extraction      5.1%      4.3%
     Retail sales      2%      1.6%
     Food      1.7%      1.2%
     Non-food      2.4%      1.9%
     Real wages      0%*      0%
* Data was revised by Rosstat



Author: Marina Tsutskiridze, Junior Investment Specialist



To watch...


No material is planned

Sources: Vedomosti, Bloomberg, Rosstat, TKB Investment Partners (JSC); April 2019



Quarterly results: Actual vs. consensus for EPS (Earnings Per Shares), adjusted (US dollars)*


Major RTS index constituents     Q1 2018     Q2 2018     Q3 2018     Q4 2018
     Lukoil 9% 1%  22.3% 18.8%
     Gazprom 9% -12.3% 29.2%  
     Sberbank 12% -4% 4.5% 14.1%
     Novatek 13% 6% 20.5%  
     Tatneft 8% 33.7% 41.2% -18.8%
     Magnit -12% -19% 12.4% 7.8%
     MTS -8% -8% 13.6% -46.1%
     VTB 170% 7% -90.7%  
     Alrosa 64% 13% -10.9% -12.2%
     Severstal -14% 14% 0% -10.7%
     NLMK -4% 14% 12.3%  
     Moscow Exchange -7% -8%
4.2% 10.6%
     Magnitogorsk Iron & Steel -22% 6% 0% -20%
     Phosagro -31% -45% -8% -41.5%
 
* based on Bloomberg consensus

TBA – to be announced

  Actual figure is better than consensus by more than 5%
  Actual figure is worse than consensus by more than 5%
  The deviation of actual results from consensus is between -5% and 5%

Source: Bloomberg, TKB Investment Partners, data as of April 19th, 2019

The above-mentioned companies are for illustrative purpose only, are not intended as solicitation of the purchase of such securities, and does not constitute any investment advice or recommendation