Stock Market Review for June 16, 2021 – ForTrader.org Financial Magazine


Market the day before

The growth was replaced by a correction. At the end of the day, shares of Surgutneftegaz added in price (SNGS 38.265, + 2.67%). The outsiders were Phosagro (PHOR 4,942, -3.16%). The USD / RUB pair was trading in the range of 72-72.50.

Market and company news

X5 Group (FIVE 2,292.5, -0.61%, 12-month target: RUB 3,150) will close the Karusel hypermarket segment. The chain has about 90 stores. Its revenue in the first quarter amounted to about RUB 10 billion, down 50% YoY. The pandemic aggravated the situation of hypermarkets: their traffic and sales fell. Volumes were redistributed between online and convenience stores. As a result, X5’s total revenues increased by 8%. We assess the initiative positively. Some stores will move to the Perekrestok segment with revenues of about RUB 90 billion. per quarter, some will be bought by O’Key or Lenta. The amount for which the stores will be sold cannot be named, since it is not known what part will be sold.

Yandex (YNDX 4,952.2, -2.72%) may enter the retail financial products market. The media reported on the intention of the holding to launch a bank card service in 2022. This is a fairly competitive market, so Yandex will not be able to quickly take a significant share in it only through a recognizable brand and marketing. In Russia, at the beginning of the year, 305 million bank cards were issued, of which only about 40 million were credit cards. Their number is growing by 5-10% annually, doubling in nine years. In general, the market can be considered saturated. If the number of clients has not reached a million, the card business does not bring significant income to financial institutions. We are not revising our financial outlook for Yandex in connection with media reports, as the effect from the banking business is expected no earlier than 2022.

Trading Ideas

X5 Group (FIVE 2,292.5, -0.61%), spec. purchase, the nearest goal: 2 650 rubles. We keep the long-term forecast at 3,150 rubles. The immediate target is the previous local maximum of about RUB 2,650. The growth drivers for the securities are the tourist season, as well as the rise in food prices.

Expectations

We expect mixed dynamics. The focus is on negotiations between the leaders of the United States and Russia. Forecast for the USD / RUB pair: range 72.00-72.50. The benchmark for the Moscow Exchange index: 3800-3850 points.

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