Stock Market Review for June 1, 2021 – ForTrader.org Financial Magazine


Market the day before

The trading dynamics were multidirectional. The growth leaders were securities of the Mechel holding (MTLR 116, + 0.46%). The shares of the strongest companies in the metallurgical industry Severstal (CHMF 1,682, -4.33%) and Norilsk Nickel (GMKN 26,348, -2.90%) looked worse than the market. The USD / RUB pair was trading near the 73.50 mark, responding weakly to the end of the tax period, as well as to the rise in the price of Brent above $ 69 per barrel.

Market and company news

The focus is on the discussion around metallurgists. The focus is on the phrase taken out of context by First Deputy Prime Minister Andrei Belousov about “100 billion rubles lost by the state.” from the metallurgical industry. It should be noted that the topic of “high incomes and low taxes” of enterprises in this sector arose about a year and a half ago. Now the market reaction to news of this kind is not so noticeable anymore.

The growth in the performance of metallurgical companies was due to their initially strong financial position at the beginning of the economic crisis, as well as the rapid recovery in the cost of raw materials. So, the price for nickel this year reached $ 20 thousand per ton. Aluminum has risen in price from the pre-crisis $ 1,800 to $ 2,500 per ton. The cost of steel on the world market has increased approximately one and a half times over the year. However, the greatest effect from the rise in prices appeared only in the 4th quarter of 2020 and the 1st half of 2021. Tax and customs payments also rise with sales.

Today the heads of large manufacturers will meet with the head of the Ministry of Industry and Trade. An increase in severance tax and export duties is not excluded, however, most likely, the regulatory mechanism will be flexible, as in the oil industry. The state can force corporations to share profits from rising prices for raw materials on the domestic market or flatten prices in exchange for refusing to increase the tax burden on exports.

Trading Ideas

Magnet (MGNT 5 456, + 0.87%), spec. purchase, purpose: 5800 rubles. Retailer quotes are capable of breaking through the previous maximum of 5,500 rubles, the next resistance will be the level of 5,800 rubles. Investors will continue to play on the news of the purchase of Dixy, as a result of which the consolidated revenue of Magnit will approach the result of X5.

Expectations

We expect multidirectional dynamics. Forecast for the USD / RUB pair: range 73.00-73.50. The reference point for the Moscow Exchange index: the corridor 3700-3750 points.

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