Russian stocks seen mixed ahead of central bank board meeting

MOSCOW, Dec 14 (PRIME) -- The Russian MOEX Russia Index is likely to rise and the RTS decrease on Friday morning ahead of a meeting of the central bank’s board of directors, who will decide on the key rate, analysts said.

“The central bank board of directors meeting is in focus,” Georgy Vashchenko, head of investment company Freedom Finance’s department of operations on the Russian stock market, said.

He said that two thirds of the market believe that the rate will stay flat in the absence of strong trends in inflation and industrial production.

However, a possible rate rise by the U.S. Federal Reserve System (Fed) in December will make the ruble a less attractive asset, and the Russian oil export income is to fall. The central bank will start buying about 7% of foreign currency trade turnover from the market, creating additional pressure on the ruble.

Inflation will be accelerated by rising value-added tax (VAT). All these factors can force the central bank raise the rate at the meeting on Friday or the next one.

Investment company Olma’s senior analyst Anton Startsev said, “Correction of the RTS Index is possible today at the start of trade due to the influence of the external background. Investors’ concerns over stability of global economic growth caused by yesterday’s comment by the European Central Bank have intensified today by data about the Chinese economy, which turned out to be weaker than forecasts on average.”

Sergei Drozdov, investment company Finam’s analyst, said that foreign investors are looking for reasons to be optimistic because the negotiations between the U.S. and China have progressed a little, and Brent grew by 2.33% on Thursday.

Vashchenko said that the Russian stock market is to be mixed with the MOEX Russia Index fluctuating at 2,350–2,400 after closing at 2,378.50.

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