Russian stocks fall on bad corporate news, tax concerns

MOSCOW, Jan 22 (PRIME) – The Russian stocks contracted on Wednesday as investors were concerned with local corporate news and possibilities of a higher taxation of the energy sector, analysts said.

The MOEX Russia Index fell 1.08% to 3,174.62 and the RTS decreased 1.31% to 1,612.87.

“The Russian market’s technical correction was unavoidable…There were several reasons for the correction, including not very upbeat reports of Russian metals companies and reduction of the outlook on the long-term default rating of RUSAL to Negative by Fitch Ratings,” Yaroslav Kabakov, director for strategy at investment company Finam, said.

As a result, shares of RUSAL plummeted by 6.12% to 35.535 rubles today.

“We only need to add the strengthening union between China and the U.S. and agreements on hydrocarbon sales to China that curb exports of Russia, and the possibility of a similar situation in Europe to the picture, to have a big reason for Russian investors assets to be concerned,” Kabakov said.

Andrei Kochetkov, senior analyst at Otkritie Broker, said that the sales dominated the commodity sectors of the Russian market, including metals, oil, and gas companies.

“In our morning review we supposed that investors would continue pricing in the rumors regarding an increase of the debt burden on commodity companies to finance national projects. We should point to a dive on high volumes in Surgutneftegas,” Kochetkov said.

No corporate news came from the company, but the expected increase of the burden on the energy business raised the need to take profits after a rise at the end of 2019, Kochetkov said.

Surgutneftegas lost 4.88% to 49.50 rubles.

Kochetkov also said that companies of the retail sector were in the focus of buyers, with depositary receipts of X5 Retail Group and shares of children goods retailer Detsky Mir rising 2.50% to 2,150.50 rubles and 1.55% to 117.60 rubles. The retail industry thrives on hopes that financial flows in direction of Russians will grow, he said.

Below are the MOEX Russia Index’ five most active stocks on Wednesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.57	266.54	11.869
Gazprom	-1.93	248.10	9.729
Surgutneftegas	-4.88	49.50	6.281
Lukoil	-0.79	6655.50	5.845
Rosneft	-1.65	478.15	5.633

(61.8552 rubles – U.S. $1)

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