What awaits the Russian stock market in 2024?

By 2023, the Russian stock market had almost fully recovered from the devastating effects of the preceding crisis year.

Since the start of the year, the Moscow Exchange index, which tracks the 45 most liquid stocks of the biggest Russian companies, has increased by 43%.

The RTS dollar index saw an increase of nearly 9% during this period.

RBC reports that the return to dividend payments, the restoration of income of Russian companies, and their adaptation to the new reality all contributed to the growth of shares. Additionally, the market was bolstered by the issuers' resumption of disclosing financial statements.

It is predicted that Gazprombank's total dividend payments in 2023 will be 2.6 trillion rubles, and could potentially rise by 85% to 4.8 trillion rubles in 2024.

Analysts surveyed by RBC Investments predict that the Russian stock market will face difficulty at the start of the year due to the Central Bank's key rate rising to 16%.

In the second half of the year, Russian assets are expected to increase due to the anticipated decrease in the Central Bank rate.

Sovcombank believes that positive financial results, dividends from oil companies, and the return of metallurgists and other sectors to dividends will be a major factor in driving market growth.

PSB anticipates that market conditions will be more favorable in the spring. The upcoming dividend season, the increasing trust in the Bank of Russia's upcoming cut in the key rate, and the expiration of deposits opened at high rates could potentially stimulate demand for stocks.

The potential for a decrease in oil prices and an overly strong ruble exchange rate could be a major risk. Additionally, the volatility may be heightened due to the redomiciliation of certain quasi-Russian companies.

Should geopolitical risks cause a delay in the Central Bank's policy easing, some investors may look to bonds or deposits for more attractive rates. Currently, the average OFZ rate is around 13%, which is higher than the expected dividend yield of the Moscow Exchange index of 10%.