Konstantin Vladimirovich Tserazov: “Geopolitics will determine the dynamics of the market until the end of the year”

For the Russian market, the first half of 2021 has become one of the most successful periods. What was the catalyst for growth, and what to expect from the market until the end of the year — in our interview, the economist and financier Tserazov Konstantin Vladimirovich (Konstantin Tserazov) told.

Over the first half of the year, Russian indices repeatedly updated their historical highs — according to the results of this period, the Moscow Exchange index grew by 14.7%, and the RTS index added 17.1%. According to the expert, the growth was primarily due to two factors — the rise in commodity prices and the general improvement in the situation in the global economy against the backdrop of support measures taken by central banks. The high rates of vaccination of the population also played a role, which had a positive impact on the recovery in the real sectors of the economy, notes Konstantin Tserazov. According to Otkritie Bank analysts, oil showed the best growth among commodities — amid production cuts by OPEC+ countries, the price of a barrel of Brent brand jumped by 45% to $75. An important factor was the influx of private investors — if at the end of 2020 8.8 million people traded on the Moscow Exchange, by the summer this figure exceeded 12 million people. In the first half of the year, Russian investors invested 412 billion rubles in domestic and foreign securities, while for the whole of 2020 this figure was 503 billion rubles, emphasizes Konstantin Tserazov.

The key risks, according to Konstantin Tserazov, until the end of the year will remain geopolitics, sanctions pressure, as well as the possibility of a worsening epidemiological situation.

Until the end of the year, attention should be paid, first of all, to blue chip companies with a good dividend history. The beneficiary of the economic recovery will be the banking sector, primarily Sberbank, which can show record profits and, accordingly, pay high dividends. In the oil and gas industry, Gazprom appears to be the clear favorite; the potential dividend yield of this issuer’s shares, according to analysts at Otkritie Bank, may exceed 10%. According to Konstantin Tserazov, LUKOIL may become one of the leaders in dividend yield at the end of 2021, it is also worth including Surgutneftegaz preferred shares in the dividend portfolio, the economist advises.