Stock Market Review for May 24, 2021 – ForTrader.org Financial Magazine


Market the day before

On May 21, positive trading dynamics prevailed. In the afternoon, most of the blue chips entered the green zone. The leaders of growth were again Mechel prefs (MTLRP 114.00, + 16.62%). Shares of another coal company, Raspadskaya, traded worse than the market (RASP 259.3, -2.52%).

Market and company news

The USD / RUB pair dropped below 73.50. Despite the cheapening of oil, the ruble showed strengthening to its maximum in a month against the background of the weakening of geopolitical tensions. In addition, non-residents showed great interest in the new issue of government bonds. The main pressure on the ruble is exerted by the factor of withdrawal of dividends, but it will take full effect only in June (this year the payout season has shifted by a month). On the other hand, the deterioration of the liquidity situation on the market contributes to the strengthening of the national currency: by the end of May, companies will have significant tax payments (about 1.3 trillion rubles), which will be partially made through the sale of foreign currency assets. As a result, we do not expect the ruble to weaken in the near future: the tentative corridor for the next week is 72.50–74.50. If the lower border of this range is broken, a short-term downward movement is possible, however, we most likely will not see significant sales of the currency. Large investors will probably prefer to wait for the Central Bank’s decision on the key rate on June 11.

Trading Ideas

X5 Group (FIVE 2,268.0, + 1.70%), spec. purchase, purpose: 2,400 rubles. On Friday, shares showed a rebound after a correction. We expect consumer stocks to rise in the coming days. Unlike Magnit and Lenta, X5 shares have been steadily declining for seven months in the absence of fundamental drivers. At the same time, X5 will remain the largest player in its segment. Long-term target price: RUB 3,150 for the paper.

Expectations

We expect lateral dynamics. On the local market, the focus is on unemployment, retail sales and GDP estimates for April. Forecast for the USD / RUB pair: range 73.00–74.00. The benchmark for the Moscow Exchange index: 3650-3700 points.

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