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MOEX, RTS seen regaining some ground in 2023
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Russian market crashed after Feb. 24, 2022
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MOEX seen at 2,300 by mid-2023, at 2,635 by end-2023
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RTS seen reaching 985 by mid-2023 and 1,150 by end-2023
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cpurl://apps.cp./cms/?pageId=stock-index-poll poll data
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By Alexander Marrow MOSCOW, Feb 22 (Reuters) - Declining oil and gas revenues and the prospect of a higher tax burden are set to combine with geopolitical uncertainty and sanctions threats to restrain growth on Russia's stock market this year, a Reuters poll of 12 strategists showed on Wednesday. The Russian market crashed last February after Moscow sent tens of thousands of troops into Ukraine, triggering sweeping western sanctions. Risk aversion has soared but some fundamentals, such as a strong price of oil, Russia's main export, underpinned the market. However, Western embargoes and price caps on Russian energy products are now curtailing those crucial exports, in turn curbing growth on Russian equity markets, which are heavily weighted towards energy and commodity stocks. The almost one-year old conflict in Ukraine will continue to weigh, analysts said. The MOEX rouble-denominated index was expected to reach 2,300 by mid-2023, up about 5.3% from Monday's close of 2,183.57, according to the Feb. 10-21 Reuters poll. Forecasts were less optimistic than in the previous two polls, conducted in November and August. "The main risk for the Russian stock market in the coming months is a deterioration in the geopolitical situation due to the ongoing conflict in Ukraine," said Veles Capital analyst Elena Kozhukhova. An imminent peaceful resolution is not envisaged, she added. Heightened sanctions pressure on Russia means increased selling risks must be taken into account in the medium term, Kozhukhova added, while additional tax contributions from the corporate sector will put pressure on companies' financial performance. Moscow expects to raise around 300 billion roubles ($4 billion) from a one-off "voluntary" tax, which Finance Minister Anton Siluanov said last week would be collected from businesses based on the "dynamics" of their results over the last few years. "The key threat to the Russian economy over the coming year is the expected decline in revenues from oil and natural gas exports, combined with an increase in the tax burden," said Vitaly Manzhos of Algo Capital. "At the same time, the domestic MOEX and RTS stock indexes are quite capable of demonstrating stability at current levels, and even a significant increase if signs of an improvement in the external political background appear." Russia has restricted trading for foreign investors, drastically reducing external liquidity on stock markets, and domestic retail investors have become the main driving force. Mikhail Shulgin, head of global research at Otkritie Investments said equities looked more attractive than other assets popular with Russian investors, namely real estate and OFZ treasury bonds. Forecasts for the MOEX index reading in late 2023 in the February poll varied from 1,680 to 3,450. The dollar-based RTS index was forecast to trade at 985 points by mid-2023, a little under 7% higher than Monday's close of 921.51. (Other stories from the Reuters global stock markets poll package: ) ($1 = 75.0610 roubles) (Reporting and polling by Alexander Marrow; additional polling by Aditi Verma, Milounee Purohit and Mumal Rathore)
