Russian stocks may fall on sanction woes, ruble rebound

MOSCOW, Aug 10 (PRIME) -- Russian stocks may fall on Friday morning as the imposed and potential U.S. sanctions, and a possible upward correction in the ruble would leave shares of exporting companies without support at a time when the government may slap more taxes on exporters, analysts said.

“The ‘sanction factor’ is very likely to maintain its negative influence on the Russian stock market at the beginning of the day, Moreover, the general external background prevents investors from resuming activity. The Brent oil futures lost 0.3% more yesterday, the MSCI EM emerging markets index and the S&P500 both eased on Thursday, and the VIX volatility index grew for the first time in six consecutive trade sessions,” Anton Startsev, a senior analyst at investment company Olma, said.

“Still, we don’t rule out closure of speculative short positions before the weekend.”

Alexei Antonov, an analyst at Alor Broker, said that the MOEX Russia index rose 0.7% and climbed above 2,300 on Thursday as market players started to realize that the upcoming sanctions are not as scary as they thought while the ruble’s 1.6% slump supported exporting companies.

“The Russian currency has come close to a strong resistance level of 67 rubles per U.S. dollar, and a new negative impact is necessary to break through it. So, we are likely to see a correctional rebound in the U.S. dollar-ruble pair to the level of 65.70–66 rubles today, supported by closure of short positions prior to the weekend. If this scenario happens, exporters would be left without support of the weakening ruble,” Antonov said.

Media reported that presidential aide Andrei Belousov suggested an additional tax on incomes of metals, petrochemical, and fertilizer producing companies of up to 500 billion rubles a year as they pay less taxes than the oil and gas industry, he said.

“The probability of this initiative to pass in the government is much higher that for the U.S. sanctions to be approved exactly in the way they were suggested. That is why shares of metals companies may suffer blows from both sides today,” Antonov added.

(66.2856 rubles – U.S. $1)

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