The stock market and the ruble are waiting for new anti-records in case of further aggravation of the situation around Ukraine, the experts interviewed by Izvestia did not rule out. But this time, the domestic market and the economy are better prepared for new shocks than in 2014, analysts say. According to forecasts, without Russia’s intervention in the situation, the Moscow Exchange index may test levels below 3,000 points. And the national currency to go above 80 per dollar. On Monday, February 21, by 22:10 Moscow time, the Moscow Exchange index fell to 2809.5 points (-17.2%), and the prices of most blue chips did not collapse within 24.1%. At the same time, the Central Bank has the experience of the crisis years of 2014-2015 and 2020 to maintain financial stability, analysts emphasized.
Test of strength
On the morning of February 21, trading on the Moscow Exchange started in the green zone, but then turned into a moderate minus, showing by 13:00 Moscow time the Moscow Exchange index fell by 2.9%, and the RTS — by 3%.. However, due to the aggravation of the military situation in the Donbass and the ongoing clashes in the second half, the decline in indicators accelerated sharply. Closer to 18:00 Moscow time, during the discussion of the recognition of the independence of the DPR and LPR at a meeting of the Security Council of the Russian Federation, their indicators fell by 14-17%, respectively. The main trading session on Monday ended with a rollback of the Moscow Exchange index to 3063 points (-10.5%), RTS – 1207 (-13.21%). Today’s the fall equated their values with the levels of November 2020. Whereas in terms of scale it bypassed the shocks of the 2008 crisis.
By 22:10 Moscow time, the Moscow Exchange index fell to 2809.5 points (-17.2%), the prices of most blue chips did not collapse within 24.1%.
Meanwhile the ruble at the moment was traded against the dollar at 80, the euro – at 90.29. Previously, a similar rate of “Russians” to “Americans” and “Europeans” was fixed at the end of January.
Izvestia asked experts to assess the readiness of Russian assets for possible shocks and sanctions due to the escalation of the situation. According to the chief analyst of Sovcombank Mikhail Vasiliev, the domestic market and the economy are better prepared for the deterioration of the situation around Ukraine compared to 2014. He emphasized: Russia’s gold and foreign exchange reserves grew to an impressive $639.6 billion by February of this year and more than cover the country’s external debt, which decreased to $478 billion at the end of 2021. The country has the lowest ratio of external debt to GDP among all major countries, the expert pointed out.
Besides against the backdrop of confrontation with the United States, investments in dollars were reducedMikhail Vasiliev continued. Besides, The Central Bank has experience in the crisis years of 2014-2015 and 2020 to maintain financial stabilityadded the analyst. Speaking about the differences in situations, Nikolai Pereslavsky, an employee of the CMS Institute, noted that dividends have become much higher since 2014, and the sanctions packages no longer include the rejection of energy resources imported by Europe. However, the fall of the market can still continue, he is sure.
At the same time, today’s market behavior cannot be called unprecedented, because there was definitely preparation for it, and the words of the Prime Minister about import substitution and that the economy will withstand new sanctions speak of the likelihood of continuation, Nikolai Pereslavsky admitted.
Comparison with 2014 is incorrect, since this time there is no talk of annexing the territories, Maxim Shein, Head of Investment Strategies at BCS Mir Investments, said. According to him, in the event of new tough sanctions, there will be strong pressure on the ruble, but the Central Bank will help it resist with its actions.
New anti-records
According to the baseline scenario, the Moscow Exchange Index in the next one or two months may update a minimum and consolidate below 3,000 pointsbut the appearance of information about the entry into the conflict of the military from the Russian Federation will greatly aggravate the situation, admitted the head of the Finam stock analysis department, Natalya Malykh.
It is difficult to predict the size of the correction in a negative light, since the scenarios in the current situation can be completely different, Anton Zatolokin, head of the Otkritie Investments market analysis department, admitted. With the introduction of tough anti-Russian sanctions, the size of the fall can reach 30-40% from the local maximum recorded on February 16, of which the domestic market has already corrected by 20% according to the Moscow Exchange indexhe predicted.
The European Union is developing a package of anti-Russian sanctions in coordination with the United States, Great Britain and Canada, while continuing to coordinate plans with South Korea, Japan and Switzerland: such a decision can be made within a few days, said Finam analyst Alexander Potavin. In a moderately negative scenario, the target for the growth of the dollar will be the region of 82-86 rubles – earlier there were highs in 2016 and 2020.
Fundamentally, Russian assets retain their long-term attractiveness, stressed Anton Zatolokin. That’s why recommendation – keep cool and existing positions in Russian assetshe concluded. No matter how the situation develops, it is too late to take any action now, added the founder of Anderida Financial Group, Alexey Tarapovsky. Therefore, it is better to turn to a long-term investment strategy, he concluded.
#market #scene #readiness #exchanges #shocks