Guideline for the Moscow Exchange index: a corridor of 3650-3700 points


Market the day before

The trading dynamics were multidirectional. The external background exerted pressure on the market, while the oil price rose to almost $ 70 per barrel. The growth leaders were shares of Rosneft (ROSNN 548.6, -3.12%). The outsiders were TCS shares (TCSG 4 670, -3.62%) amid analysts’ comments after the publication of the report and within the industry dynamics. The USD / RUB pair was trading in the range of 74.0–74.50.

Market and company news

Rostelecom (RTKM 102.09, -1.36%) will report for the 1st quarter. The company’s revenue is expected to reach 133 billion rubles, EBITDA – 26 billion rubles. Thus, the business growth rate will be about 9% and will be maintained at about 10% in the future. However, in our view, the reaction of investors to Rostelecom’s financial statements will be restrained due to the weak dynamics of telecom shares in the coming weeks and the interest of market participants in other sectors. The target price of the paper at the end of the year is 120 rubles.

Trading Ideas

Aeroflot (AFLT 65.9, -0.63%), spec. purchase, purpose: 74 rubles. We expect the company to resume ticket sales on many destinations, including overseas, and to increase the number of flights in the summer. If strict quarantine restrictions are lifted in European countries, Aeroflot’s traffic may reach record levels in the 3rd quarter of 2021. The resumption of flights to southern European countries may be announced as early as the coming week.

Expectations

We expect mixed dynamics. Forecast for the USD / RUB pair: range 73.50-74.50. The reference point for the Moscow Exchange index: the corridor 3650-3700 points.

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