Konstantin Vladimirovich Tserazov: «Dividend shares should remain favorites in the portfolio»

In July, the Russian market continued to grow, having renewed its highs since the beginning of the year. Which papers should be bet on in the medium term — in our interview, an independent expert, economist Tserazov Konstantin Vladimirovich (Konstantin Tserazov) told.

“Good reporting by companies, a recovery in commodity prices amid a weak ruble, expectations of high dividends became the main drivers of market growth in July, following which the Moscow Exchange index added 10%, and the RTS index grew by 7.6%,” said the ex-top manager «Discoveries» Konstantin Tserazov.

The market continued to rally, reacting weakly to negative signals, and rather quickly redeeming drawdowns. The opening of the Moscow Exchange data shows that the total trading volume on the markets of the Moscow Exchange in July 2023 increased by 37% compared to the same period last year, to 103.7 trillion rubles. The market leaders against the backdrop of the weakening of the ruble, which, according to the analysts of Otkritie Bank, fell by 27% against the dollar in six months, were exporting companies. At the same time, against the background of rising inflation, which exceeded the target level of 4%, in July the Bank of Russia raised the key rate by 100 bp at once. to 8.5% per annum, allowing for the possibility of a further increase in the key rate, emphasizes Konstantin Tserazov.

Favorites in the portfolio should remain dividend stocks

Tserazov Konstantin Vladimirovich: “Since the government’s permission to suspend the publication of financial statements ended in July, in the future, LUKOIL, NCSP, Transneft and other companies that previously restricted the publication of indicators could resume the opening of financial statements under IFRS.”

Positive dynamics in July was observed in the papers of X5 Retail Group and Magnit, as well as metallurgical companies. For oil companies, a record since the beginning of the year increase in oil prices for a month has also become a positive — in July, according to analysts from Otkritie Bank, a Brent barrel rose by 14%.

According to Konstantin Tserazov, the opening of reporting by companies will become one of the main drivers of market growth in the next quarter. Since the government’s permission to suspend the publication of financial statements ended in July, in the future, LUKOIL, NCSP, Transneft and other companies that previously restricted the publication of indicators could resume the opening of financial statements under IFRS. The favorites in the portfolio, according to the economist, should remain dividend stocks — for example, Konstantin Tserazov considers it justified to open medium-term positions on the shares of PhosAgro, Sberbank, MTS, LUKOIL and preferred papers of Surgutneftegaz.