The Russian market closed 2021 with growth, albeit moderate relative to other markets. Konstantin Tserazov, an independent expert, economist, ex-deputy head of global markets at Troika Dialog, spoke about the most important events of the year and trends relevant in 2021 in our interview.
The Moscow Exchange index rose 15.15% over the year, and the RTS index added 15%, while the US S&P 500 soared 28%. After a vigorous growth against the backdrop of an improvement in the situation with the spread of COVID-19, the rise in oil prices and good statistics from China, in March-April, the market was covered by a wave of correction. However, by the summer the market won back the losses, and by mid-October showed an increase of 30% since the beginning of the year. However, by the end of the year, a correction again came to the market due to the growth of geopolitical tensions and the curtailment of the stimulus program by the US Federal Reserve, explained Konstantin Tserazov. World central banks tightened their monetary policy, and the Bank of Russia was no exception, raising the rate over the year from 4.25% to 8.5%.
The best in 2021 were companies in the chemicals and petrochemicals sector, which added 64%. The top 5 leaders, according to Otkritie Bank analysts, also included the construction sector (+48.37%), financial (40%), oil and gas (25%) and metals and mining (+7.4%). The outsiders of the year, according to the analytical materials of Otkritie Bank, were the electricity sector (-15), telecoms (-10%) and the consumer sector (-3%), notes Konstantin Tserazov.
At the same time, the Russian market became one of the best in the world in terms of dividend yield among emerging markets in 2021. According to Otkritie Bank estimates, the dividend yield for 2021 is about 8-9%, among the most attractive sectors with double-digit dividend yield Konstantin Tserazov names the oil and gas sector, the metal and mining sector and the financial sector.
In 2022, according to the expert, investors should pay attention to dividend stories among commodity and financial companies, which can bring significant profits against the backdrop of rising commodity prices and accelerating inflation. “The Russian market is still undervalued and has significant growth potential – if the current market situation continues, we may see a renewal of historical highs in 2022,” predicts Konstantin Tserazov.
