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Russian MOEX Stock Index to Climb to Record Highs in 2021

MOSCOW, May 26 (Reuters) - Russia’s stock market will climb to record highs this year thanks to a recovery in commodity prices and still-low interest rates globally, although there are also risks of a downside correction, a Reuters poll of 13 market experts forecast.

Russian stocks collapsed in the first quarter of last year under pressure from a drop in the price of oil, Russia’s major export, and the coronavirus pandemic, but recouped those losses by end-2020 and are on track to advance further.

The MOEX rouble-denominated index, which hit a record high of 3,713.49 on May 10, was expected to reach 3,819 by the end of this year, up about 4.3% from Monday’s close of 3,662.51, according to the May 10-25 Reuters poll.

The Russian stock market will lean towards higher levels in the next three months and may see inflows as Russia and the United States are preparing for a bilateral summit in June, said Mikhail Vasilyev from Sovcombank.

Gazprombank said the market may face a summer correction of up to 10%, however, due to a slower vaccination against COVID-19 in emerging markets compared to that in developed economies.

The global economic recovery, rising oil prices and accommodative monetary policy by major central banks also work in favour of Russian stocks.

“The main risk for the Russian stock market is still the threat of harsher sanctions. But new restrictive measures are mostly of a personal and selective nature. Thus the sanction threat for the local market has somewhat eased,” said Vitaly Manzhos from Algo Capital.

By the end of 2022, the MOEX is seen reaching 4,210, with forecasts ranging between 3,800 and 5,250.

Retail investors play an increasingly important role on the Russian stock market. Its high dividend yields proved an attractive proposition for people last year as they turned to trading in droves, a trend spurred by coronavirus lockdowns that kept them at home.

The dollar-based RTS index was forecast to trade at 1,690 points by the end of this year, up about 7.6% from 1,570.90 on Monday.

The RTS was seen climbing further to 1,880 by end-2022, its highest since mid-2011, with forecasts ranging from 1,700 to 2,300.

Reporting by Andrey Ostroukh; additional polling by Swathi Nair, Manzer Hussain and Richa Rebello Editing by Gareth Jones

Source: Reuters


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