The Moscow Exchange Index will trade within 3500-3550 points


Market the day before

Negative dynamics prevailed. The main reason for it was the decline in external markets. The growth leaders were shares of Polymetal (POLY 1,693.9, + 1.97%). The list of outsiders included securities of TCS Group (TCSG 4 390.6, -3.73%). The USD / RUB pair was trading in the range of 76.00-77.00.

Market and company news

MMK (MAGN 67.15, -2.23%) will report for the first quarter under IFRS. The forecast assumes revenue of $ 2208 million, EBITDA of $ 687 million and profit of $ 394 million. At the end of the year, these figures are expected today at $ 8700 million, $ 2400 million and $ 1400 million, respectively. However, we believe that the annual forecast will soon be improved due to the rise in rental prices. Steel has already risen in price by 20% since the beginning of the year. Perhaps this trend will continue.

Signals appear to tighten the monetary policy of the Central Bank of the Russian Federation. More and more analysts are inclined in favor of raising the key rate at the next meeting to 5%. We consider this unlikely, but possible. The rate hike was mainly due to the acceleration of inflation. For the economy and the stock market, the best option would be to maintain soft monetary conditions, such as in the United States, until at least June. The ruble does not need to be protected by an immediate rate hike amid high export prices and strong domestic demand.

Trading Ideas

LUKOIL (LKOH 5,890.0, -1.95%), spec. purchase, purpose: 6,700 rubles. LUKOIL’s quotes lagged behind other shares in the oil and gas sector, an additional driver for their growth is the rise in oil prices and the approaching season of active road transport.

Expectations

We expect a moderate decline. Correction in foreign markets is likely to continue. The Moscow Exchange index will trade within 3500-3550 points, the nearest support is located at 3450 points. The shares of telecoms and metallurgy are used as protective instruments. Forecast for the USD / RUB pair: range 76.50-77.50.

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