Russian stocks fall on coronavirus fears, new tax initiatives

MOSCOW, Jun 29 (PRIME) -- The Russian stock market contracted on Tuesday as on the news about the spread of a new coronavirus type, while the government’s tax initiatives for the key mining companies only exacerbated the fall, analysts said.

The MOEX Russia Index fell 0.91% to 3,790.85 and the RTS decreased 1.78% to 1,640.08.

“The Russian stock market showed significant contraction on Tuesday. Investors still fear the negative impact of the new coronavirus type spread in Russia … and the Asian floors closed lower, which also added some negative momentum,” Sergei Kaufman, analyst at investment company Finam, said.

The metals companies again underperformed the market as investors are still unsure about the blow the industry will suffer from introduction of export duties, Kaufman said.

Aluminum giant UC RUSAL lost 2.84% to 47.60 rubles and steelmakers Novolipetsk Steel (NLMK) and Severstal shrank by 2.49% to 226.02 rubles and 2.04% to 1,539.40 rubles, respectively.

“Lower buyer activity on the Russian market was again prompted by information about the government’s plans to toughen tax conditions for some key mining companies. At the same time, uncertainty about Thursday’s meeting of the OPEC alliance still exists. The market is also waiting for the news from the central bank’s financial congress,” Alexander Osin, head of Freedom Finance’s department for trade operations on the Russian stock market, said.

The regulator raised the key rate by 0.5 percentage points to 5.5% annually in June. In the middle of the quarter, retail sales and industrial output grew, and annual inflation sped up to 6.3%, which makes another increase of the key rate by 25–50 basis points possible, Osin said.

Shares of multi-industry holding Sistema gained XX% to XX rubles following the sale of an 11.2% stake in pharmaceutical subsidiary Binnopharm to VTB Bank. The deal raised the asset’s valuation prior to an initial public offering, and the market may also revise the fair price of Sistema’s shares and raise it by 3–6%, Osin said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.40	305.14	10.033
Gazprom	-0.36	276.00	9.990
Lukoil	-1.18	6679.00	8.474
Norilsk Nickel	-0.81	24746.00	5.159
ALROSA	+0.21	133.51	5.157

(72.1777 rubles – U.S. $1)

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