The Russian stock market will hardly grow next year; VTB believes that in 2024 the Moscow Exchange index will increase by only 5%. Although since the beginning of this year the figure has increased by 50%. Among the main reasons are the high key rate, due to which company bonds and bank deposits become more attractive. VTB noted that the stock market will grow more strongly if the Central Bank lowers the key rate.
In addition, the bank predicts a boom in initial public offerings: they expect about ten IPOs next year. This, however, will not help the stock market much, noted Georgy Vashchenko, deputy director of the analytical department of Freedom Finance Global:
“The main driver of market growth is the influx of money. This means, in particular, the arrival of new investors, including international ones. But within the framework of the base scenario, I do not envisage such an option.
Or we can talk about inflationary market growth, for example, if a risk scenario comes true. For example, this could happen subject to a sharp drop in export revenues, tightening sanctions, mortgage conditions, and so on. Then investors will put money into local stocks, and we will be able to see 3600 points on the Moscow Exchange index and higher.
In the base scenario, I believe that the growth will be much less, about 3,300 points. It should be taken into account that dividends from individual companies will also add 5-10% to the profitability.
As for IPOs, it is both a driver and a brake for the market, oddly enough. Because, on the one hand, interest in new securities is very high, we see significant oversubscription. But, on the other hand, this distracts liquidity, since money does not go into old assets, but only into new ones.”
Over the year, one of the most growing securities from the Moscow Exchange index were preferred shares of Surgutneftegaz, which rose in price by more than 120%. In addition, the securities of the site itself have doubled their value. Also, the price of Sberbank preferred shares increased by almost 95%.
“Kommersant FM” asked Evgeniy Mironyuk, a stock market expert at BCS World of Investments, to estimate which sector securities will grow the most in 2024: “The stock market will begin to accelerate growth when the key rate begins to decline. But the main driver, of course, will be dividends. A basket of dividend stocks could yield more than 14% over the next 12 months.
As for the IPO, this is certainly a good sign. Of course, many will be able to make money, but this is primarily a speculative instrument. A conservative investor still invests in the dividend basket.
At the same time, the oil and gas sector is the most promising, despite what we believe is a temporary correction in fuel prices. First of all, those companies that will pay dividends. For example, Gazprom Neft increased its payout ratio. Tatneft doubled payments to 100% of net profit, LUKOIL pays interim dividends.
As for other sectors, shares of MTS, Sberbank, NOVATEK, Mechel, Severstal, Norilsk Nickel can be taken in anticipation of good payments. The same applies to Rosneft, which is still helped by the relatively weak ruble.”
Earlier, the head of the Ministry of Finance, Anton Siluanov, named the main financial threats for Russia in 2024: these are external risks and the unpredictability of monetary policy abroad. Foreign partners, according to the minister, “generally lost all brakes and printed a lot of money during COVID-19.”
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