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An interruption in publications due to the author’s summer vacation has come to its end and we have to admit that the worst expectations are coming true to life. This mainly concerns foreign stock markets, with which the Russian market has a closer connection than expected. Moreover, while the European markets have been growing within the last few days, the Russian stock market is still going down. The RTS Index has fallen to 2,130 points, thus the total reduction from this year highs comprised almost 20%! This is happening even in spite of the record high oil prices and stable political situation in the country. It is hard to predict how successful investments are going to be in the present situation without using futures for the RTS Index and shares. The only way to escape losses in the falling market is to sell these instruments. In fact, that is what most managers are apparently doing. This conclusion can be made on the basis of the dynamics of RTS Index futures in September.
Gazprom shares are in the bear trend. In spite of the non-bid transfer of the gigantic Chayadinskiy oil field (which is at least three times larger than Kovykty) and the similar transfer of offshore fields, the rate did not go over 320 rubles and could not even reach the important mark of 300 rubles. The shares are currently being traded at 291-293 rubles. If they drop beyond the lowest mark, it will indicate the strengthening of bear tendencies in the Russian market. The technical picture confirms that the shares are significantly oversold, but the rate is going down with an intention of testing the support level of 280 rubles. If the rate goes below this level, it will indicate a new goal of the downward trend at 250 rubles. However, opposite to this pessimistic scenario, a rapid growth from the current levels is also possible. It will be confirmed in case a few days in a row close at 300 and 305 rubles.
Nornickel has lost all its current year achievements. The price dropped to the January low of 4,975 rubles, with a small correction to 5,500 rubles afterwards. Within the last few days the rate has gradually dropped to 5,040 rubles and it is hard to predict a complete turn. However, this situation is totally different from Gazprom. The main factor contributing to Nornickel shares price decrease is a conflict between principal shareholders and, thus, insiders’ influence on the price. That may be the reason why the technical data do not reflect its being significantly oversold, in spite of such a strong fall. Purchases at the price around 5,100 and 4,950 rubles should be very careful, though they are attractive in the short-term perspective.
Sberbank shares have been trading in the downward trend since mid-May with a high of 77.86 and the low of 70 rubles. There is a distinct correlation between the share prices of the world major banks, which suffered from the mortgage crisis, and Sberbank shares.
However, it is still too early to talk about a serious crisis in the Russian stock market. Shares are being sold and assets are being transferred to resource contracts. If this trend does not stop by the end of the summer, the market will return to pre-crisis level with the RTS Index of 1,800 points (this level was observed a year ago, prior to the growth of the fall of 2007). In such circumstances the players’ main strategy will be observance of the situation with the European and American Stock Indexes.
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Return Analysis
