By mid-March 2012, the markets regained hope — Konstantin Tserazov (Tserazov Konstantin), deputy head of global markets at Troika Dialog, tells what awaits market participants and which companies to bet on.
Spring brought new hopes to Russian investors. By mid-March 2012, our market has added 15% since the beginning of the year on the MICEX index, and is stubbornly striving up. The main support for the market is high oil prices, in particular, a barrel of Brent oil rose to $125 in March. Such high prices were dictated by the growing sanctions pressure on Iran and increased tension, up to the possibility of a military conflict. Now the prices for «black gold» remain at levels that are comfortable for the Russian market, preventing the indices from falling, Konstantin Tserazov notes.
Among a number of factors that determined the upward dynamics of foreign markets, Konstantin Vladimirovich Tserazov singled out the agreement on the second package of financial assistance to Greece by the EU countries and the approval of a loan for Greece in the amount of 28 billion euros from the IMF, as well as strong statistics on the labor market in the United States. These factors indicate a high probability of continued growth, says Konstantin Tserazov. And yet, the crisis in Europe continues to put significant pressure on the markets, causing nervousness among investors. Thus, a warning from the international agency Fitch Ratings about a possible downgrade of the UK credit rating brought some negative news. The country’s rating outlook has been downgraded to negative, with Fitch noting that there is more than a 50% chance of the UK losing its top AAA rating within two years. Fitch explained its decision by the weak pace of economic recovery, high debt burden and fear of a financial crisis, says Konstantin Vladimirovich Tserazov.
At the March meeting of the US Federal Reserve, the regulator left the key discount rate in the range of 0-0.25%, while the agency did not voice hints of additional monetary stimulus to the economy. This speaks in favor of the assumption that the Fed does not consider inflation to be a threat and sees progress in economic recovery,” Konstantin Tserazov believes. The expert also noted the release of data on stress tests of the largest US banks, as a result of which 15 out of 19 tested banks announced that they would increase the cost of paying dividends and share buybacks. “The results of the stress tests brought positive to foreign markets, showing that the banking system is in good condition,” comments Konstantin Vladimirovich Tserazov.
Of the internal events, Konstantin Tserazov pointed to the share buyback announced by VTB. The bank buys back paper from minority shareholders — participants in the «people’s IPO» in 2007, almost twice as expensive as the current market value of the shares. However, the shares may not be presented for redemption based on dividends — it is predicted that the bank will pay more dividends in 2011 than in the previous year.
According to media reports, the Central Bank of the Russian Federation intends to sell the state-owned stake in Sberbank in the amount of 7.6% in April this year, so investors will pay special attention to the dynamics of the securities of the leader of the banking sector, Tserazov Konstantin believes.
Optimism in the market is formed not only by high oil prices, but also by the closing season of registers, during which the management of companies makes decisions on the payment of dividends. So, on the expectations of dividends, Transneft shares are rising in price. Good news was reported by LUKOIL, stating that in the next 10 years it intends to increase the volume of dividends by 300%, and promising to increase payments by 25% this year, Konstantin Tserazov said.
The reporting season will support the markets until the end of May, and the assumption of the office of President V. Putin will significantly reduce political risks. In the short term, oil companies such as Gazprom, Rosneft, and Lukoil will remain in the focus of investors’ attention. There are also urgent investment ideas in the energy sector — this is a number of WGCs and IDGC Holding, advises Konstantin Vladimirovich Tserazov.