Impact of the Rate Hike on Russian Stocks and Exporters

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The rise in the key interest rate triggered a decline in the shares of many Russian companies, a trend highlighted by Evgeny Kogan, head of Moscow Partners Investment Group and a professor in the Faculty of Economic Sciences at the Higher School of Economics. He spoke about these dynamics in a recent interview. (URA.RU)

Kogan attributes the stock market pullback to two main factors: an unattractively high price-to-earnings ratio for many issuers and a necessary correction after a prolonged period of rapid market growth. He also notes that after the ruble’s devaluation, exporters enjoyed a temporary hedge advantage as their earnings became more competitive in foreign currency terms. As the ruble gains a bit of strength, however, investor interest in exporters wanes. Kogan argues that this reaction is imprudent because exporters are likely to maintain strong profits even if the dollar fluctuates, given ongoing global demand and diversified revenue streams. (URA.RU)

The expert emphasizes a long-term view when considering equity purchases. He stresses that the decision to invest hinges on the investor’s time horizon. For those planning to hold positions for six months to a year, some opportunities may appear reasonable. Yet when it comes to short-term trading, measuring potential gains becomes highly uncertain and difficult to predict. (URA.RU)

Recently, the Central Bank of the Russian Federation implemented a sharp, unscheduled increase of the key rate to 12 percent, a move that has widened the gap between monetary policy expectations and market pricing. This adjustment adds another layer of complexity for investors evaluating entry points in the Russian stock market and assessing sector-specific risks and potential rewards. (URA.RU)

Overall, market participants are weighing the prospect of higher borrowing costs against the need for liquidity and the potential stabilization of the ruble. Analysts who monitor currency movements and macroeconomic signals suggest that scenarios vary widely depending on how exporters adapt to currency shifts, how corporate earnings evolve, and how quickly monetary policy transmits through the economy. In this environment, patient, value-based investors may find selective opportunities, particularly in segments where long-run fundamentals remain solid and where macro risks are adequately priced into valuations. (URA.RU)

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