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Russia's Stock Market On The Brink Of a Major RallyIn this world, everything is subject to change. Not so long ago, we all observed colossal pressure on Russia. And last month, in Alaska, for the first time in many years, the presidents of Russia and the United States met. This is the first step in big geopolitics, and also opens up great opportunities for the Russian stock market. Earlier, we wrote in a note about USDRUB that we expect a further reduction in the Central Bank of the Russian Federation's key rate. This will not only cause USDRUB to grow, but will also lead to a revaluation of companies in Russia. Today, the yield on Russian government bonds is 14% with a key rate of 18%. As the key rate decreases, the yield on government bonds will also decrease, which will cause a flow of money from bonds to stocks. At the end of next year, the CBR rate will be about 10%. The dividend yield on stocks in the Russian Federation is around 10-12%. Investors will be pricing in further rate cuts, which will cause stock revaluations As the Ukrainian conflict ends, sanctions against Russia by the United States will be partially lifted, which will reduce the geopolitical discount of risky assets in the Russian Federation. The weakening of the ruble will also help Russian exporters with revenue and profit. The stock market was under pressure not only due to geopolitical factors, but also due to the actions of the CBR, which, in addition to a strong rate hike, greatly compressed the M2 money supply. This led to historically low stock multiples (P/E, P/B) From a technical point of view, the market is finishing the last wave E in a triangle and with a further upward exit
RUS:IRUSLong
by A3MInvestments
Will Russia’s New Dawn Reshape Global Finance?As the Russo-Ukrainian War edges toward a hypothetical resolution, Russia stands poised for an economic renaissance that could redefine its place in the global arena. Retaining control over resource-laden regions like Crimea and Donbas, Russia secures access to coal, natural gas, and vital maritime routes—assets that promise a surge in national wealth. The potential lifting of U.S. sanctions further amplifies this prospect, reconnecting Russian enterprises to international markets and unleashing energy exports. Yet, this resurgence is shadowed by complexity: Russian oligarchs, architects of influence, are primed to extend their reach into these territories, striking resource deals with the U.S. at mutually beneficial rates. This presents a tantalizing yet treacherous frontier for investors—where opportunity dances with ethical and geopolitical uncertainties. The implications ripple outward, poised to recalibrate global economic currents. Lower commodity prices could ease inflationary pressures in the West, offering relief to consumers while challenging energy titans like Saudi Arabia and Canada to adapt. Foreign investors might find allure in Russia’s undervalued assets and a strengthening ruble, but caution is paramount. The oligarchs’ deft maneuvering—exploiting political leverage to secure advantageous contracts—casts an enigmatic shadow over this revival. Their pragmatic pivot toward U.S. partnerships hints at a new economic pragmatism, yet it prompts a deeper question: Can such arrangements endure, and at what cost to global stability? The stakes are high, and the outcomes remain tantalizingly uncertain. This unfolding scenario challenges us to ponder the broader horizon. How will investors weigh the promise of profit against the moral quandaries of engaging with a resurgent Russia? What might the global financial order become if Russia’s economic ascent gains momentum? The answers elude easy resolution, but the potential is undeniable—Russia’s trajectory could anchor or upend markets, depending on the world’s response. Herein lies the inspiration and the test: to navigate this landscape demands not just foresight, but a bold reckoning with the interplay of economics, ethics, and power.
RUS:IRUSLong
by UDIS_View