By Oyintari Ben
According to a Reuters survey of 12 market experts, the Russian stock market will recover some of the severe losses it suffered this year by 2023, but big gains will be hampered by sanctions, geopolitical unrest, and an oil embargo.
The MOEX rouble-denominated index was predicted by a Reuters survey to rise to 2,500 by mid-2023, up roughly 13.9% from Friday’s close of 2,195.17. In comparison to the previous poll, which was conducted in August, predictions were less upbeat.
While the Russian market is still adjusting to the sanctions environment, the scope of any future restrictions from Western nations already appears to be modest, according to Veles Capital analyst Elena Kozhukhova. As a result, Russian businesses are probably going to start stabilizing soon.
Foreign trading has been severely restricted in Russia, substantially lowering external liquidity on the stock market, while domestic retail investors have taken over as the main drivers.
The market is influenced by geopolitical events, but while the future for the situation in Ukraine is clouded by ambiguity, investors will soon have greater clarity on the anticipated effects of an impending oil embargo and price cap.
According to Vitaly Manzhos, senior risk manager at Algo Capital, “the projected drop in income from oil and natural gas exports is a very major threat to the Russian economy in the coming year.”
On December 5, the G7, the European Union, and Australia are going to put a price ceiling on Russian oil exports via sea. Exporters of oil and gas are heavily weighted in Russian stock indices.
According to Mikhail Shulgin, head of global research at Otkritie Investment, “for Russian oil producers, the 2023 prognosis is intimately tied to the influence from the EU oil embargo on Russian oil and oil products, as well as the effect from the price ceiling.”
In the November poll, predictions for the MOEX index reading in late 2023 ranged from 2,257 to 3,700.
By mid-2023, the dollar-based RTS index was predicted to be trading at 1,299 points, over 14% higher than Friday’s closing price of 1,141.07.
