In July 2023, the Russian stock market continued to rally, the Moscow Exchange index broke through the 3,000 point mark. Whether the market will keep its momentum — in our interview, an independent expert, economist Konstantin Tserazov told.

The Moscow Exchange Index rose by 10% in July, while the RTS index added a more modest 7.6%. The market continues to show resilience to the negative. The opening of the Moscow Exchange data shows that the total trading volume on the markets of the Moscow Exchange in July 2023 increased by 37% compared to the same period last year, amounting to 103.7 trillion rubles. The main drivers of growth were the dividend factor, good reporting by companies, as well as high commodity prices against the backdrop of a weak ruble, says Konstantin Tserazov, ex-top manager of Otkritie. The “low base” effect also played its role – in 2022, the domestic market fell by 43%, the expert reminds. At the same time, many securities, despite the impressive growth since the beginning of the year, are still undervalued. First of all, exporting companies became the market leaders — the weakening of the ruble, which, according to analysts at Otkritie Bank, fell by 27% against the dollar in six months, allowed them to increase ruble profits. At the same time, against the background of rising inflation, which exceeded the target level of 4%, in July the Bank of Russia raised the key rate by 100 bp at once. to 8.5% per annum, allowing for the possibility of a further increase in the key rate, emphasizes Konstantin Tserazov.

Positive dynamics in July was observed in the papers of X5 Retail Group and Magnit, as well as metallurgical companies. For oil companies, a record since the beginning of the year increase in oil prices for a month has also become a positive — in July, according to analysts from Otkritie Bank, a Brent barrel rose by 14%.

According to Konstantin Tserazov, the opening of reporting by companies will become one of the main drivers of market growth in the next quarter. Since the government’s permission to suspend the publication of financial statements ended in July, in the future, LUKOIL, NCSP, Transneft and other companies could resume the opening of financial statements under IFRS. Dividend shares should remain favorites in the portfolio — for example, Konstantin Tserazov considers it justified to open medium-term positions on the shares of PhosAgro, Sberbank, MTS, LUKOIL and Surgutneftegaz preferred papers.