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Russian stock market opens March 24 2022 first time since start of war

bigdog

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The ruble-based MOEX Russia index closed 5 points lower at 2,206 on Thursday, halting two consecutive sessions of gains as investors monitored discussions regarding the G7’s price cap on Russian oil exports and the effect it may have on state energy revenues.

Urals oil contracts currently trade at $67 per barrel, driving multiple states to argue that the current proposals of a $65-$70 ceiling are too lenient.

Still, Greece and Malta argued for higher cap values to limit the impact on their shipping industry.

Oil companies closed mostly lower, with Rosneft, Tatneft, and Lukoil dropping between 0.25% and 0.5%, but still holding gains from the week.

In the meantime, Gazprom closed flat after announcing it plans to boost investments by 16% to RUB 2.3 trillion next year.

On the macro front, the latest data showed the decline in industrial activity unexpectedly eased in October, and producer prices rose the least in two years.
 

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The ruble-based MOEX Russia index closed 0.8% lower at 2,194 on Friday, dropping 0.5% on the week as investors continued to monitor discussions regarding the EU’s price cap on Russian energy and the effect it may have on state energy revenues.

Multiple EU states deemed the suggested cap range of $65-$70/barrel too lenient, as Urals oil price benchmarks hover at $66.

Still, Greece and Malta argued for higher cap values to limit the impact on their shipping industry.

While oil giants traded in Moscow edged lower in the session, Rosneft and Lukoil closed the week on the green as the price ceiling levels discussed could have a limited impact in the country’s oil revenues.

In the meantime, Gazprom booked slight gains after announcing it plans to boost investments by 16% to RUB 2.3 trillion next year.


MOEX 12 MONTH CHART
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The ruble-based MOEX Russia index closed 0.8% lower at 2,177 on Monday, dropping for the third straight session as investors continued to monitor developments regarding price ceilings on Russian energy exports to the EU.

Final talks in Brussels were delayed over the weekend, as policymakers attempt to agree on a price cap for Russian seaborne oil exports for the use of European tankers and insurance services on deliveries to Asia next week.

Multiple states deemed the suggested price cap of $65-$70/barrel per barrel too lenient as Urals oil contracts hover well below $60, while nations with large tanker industries advocated for higher caps.

Oil giants Rosneft and Lukoil were among the sharpest losers and fell 2.7% and 2.4%, respectively.

Besides the possible European cap, widespread protests and strict lockdowns in Russia’s top oil importer, China, also added bearish pressure to the outlook of the sector.

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The ruble-based MOEX Russia index closed 0.5% higher at 2,185 mark on Tuesday, halting three straight sessions in the red as investors continued to monitor debates regarding the EU’s price ceiling on Russian seaborne oil exports.

Although EU ministers were still unable to agree on a price ceiling for European tankers and insurers to service exports to Asia next week, proposed caps fell to the $62/barrel mark.

Still, multiple states call for stricter restrictions as different commodity pricing trackers see Urals oil hovering below $60, the lowest in over one year.

Oil shares underperformed the broader index to close mixed, with Rosneft adding 0.9% but Lukoil dropping 0.5%.

On the other hand, MMK and Polymetal added over 2% each to lead the metallurgists.

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Market Data Coverage: Russia - List of Companies
 
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The ruble-based MOEX Russia index closed 0.5% higher at 2,185 mark on Tuesday, halting three straight sessions in the red as investors continued to monitor debates regarding the EU’s price ceiling on Russian seaborne oil exports.


...
Good morning bigdog
rcw1 was reading an article about this... "regarding the EU’s price ceiling on Russian seaborne oil exports." How this will affect the Russian economy and their response... and how this would affect Europe with or without Chinese support.

Age brings about forgetfulness. Must endeavour to find it again, was most interesting indeed.
Anyways have a good day bigdog.

Kind regards
rcw1
 

bigdog

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The ruble-based MOEX Russia index extended losses in the session to close 0.5% lower at 2,175 on Wednesday, fully erasing gains from the prior session as investors continued to monitor debates between EU ministers regarding the price ceiling on Russian for the use of European tankers and insurance services to Asia next week.

Oil shares further underperformed the broader index as the lack of a deal would mean that European services will be halted completely with the start of the embargo.

Investors also monitored Covid protests and the outlook for strict lockdowns in China for projections of energy demand in Russia’s top importer.

Tatneft and Surgut both slipped 1% to be among the top losers in the session.

In the meantime, Yandex closed below the flatline as investors continued to speculate on the company’s future as current restructuring measures draw it closer to the Russian government.

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rcw1

EU member states are running out of time to agree on a price cap for shipments of Russian crude oil after another round of last-ditch talks between the bloc’s ambassadors on Monday evening (28 November) ended without a deal.

The EU is set to ban almost all Russian oil imports into the bloc on 5 December, which is meant to be combined with an international price cap on shipments, but just days away from these coming into force, member states are struggling to agree on the potential cap.

“There is no deal. The legal texts have now been agreed, but Poland still can’t agree to the price,” one EU diplomat said.

Brussels has been working with G7 countries to implement the price ceiling on seaborne Russian oil, with them proposing to cap it at $65-70 a barrel.

The goal is to allow oil to continue flowing while simultaneously pushing down Moscow’s ability to fund its war in Ukraine. Under the plan, cargoes of Russian oil would have to sell at or below the cap or risk being banned from shipping insurance and reinsurance.

Unlike the gas price cap currently being negotiated by EU countries, the price cap on oil would only be applied to Russian supplies, and it would come as another sanction in the wake of Russia’s invasion of Ukraine.

Polish insistence

In Monday’s talks, EU ambassadors debated whether to set the cap as low as $62 per barrel on exports of Russian crude oil. However, several EU diplomats said consensus remains elusive, with some countries wanting to go much lower.

“The Poles are completely uncompromising on the price without suggesting an acceptable alternative,” one EU diplomat said.

Hawkish member states led by Warsaw say this will be ineffective because it is too close to the price Russia already gets on the market, meaning the sanction would not punish the Kremlin enough to cripple its war economy.

Poland, together with Lithuania and Estonia, is pushing for a significantly lower cap of around $30 and wants the implementation of the cap to be tied to the promise of the next ninth sanctions package against Russia.

“There are three elements which still need to be discussed: criteria of the price cap adjusting, the inclusion of a mechanism to the new package of sanctions, and the level of cap price,” a CEE diplomat told EURACTIV.

Russia’s oil and gas exports are forecast to account for 42% of the country’s revenues this year at 11.7 trillion roubles, up from 36% or 9.1 trillion roubles in 2021, according to Reuters, citing the country’s finance ministry.

Ukraine’s President Volodymyr Zelenskyy said on Saturday (26 November) the cost of Russian
seaborne oil should be capped at $30-$40 a barrel, Reuters said.

Mediterranean compromise
Other price cap sceptics, meanwhile, have already given ground.

EU member states, including those with big shipping industries such as Greece, Malta, and Cyprus, had wanted to ensure the price is sufficiently high to keep trade in Russian oil flowing, a position likely to be supported by the US.

These shipping countries’ concerns were “squared off” in Monday’s talks, EU diplomats said, adding that pressure is now expected to mount on the hawkish member states to compromise.

“France, Germany, and a few others are quite critical of Poland, they say: The Meds have come quite a way in compromising, now it’s time to reciprocate,” a second EU diplomat said.

Deadline looming

A new date for talks is yet to be set, EU diplomats said, even though the price cap mechanism is due to enter into force on 5 December. Expectations in Brussels are that negotiations could be concluded by the end of this week.

After several weeks of drawn-out negotiations in May, EU leaders agreed to a partial embargo on crude oil imports by sea, which will take full effect by the end of 2022.

Hungary, Slovakia, and the Czech Republic then secured exemptions from the ban for the pipeline imports they rely on.
If there is no agreement on the G7 price cap idea by next Monday, the bloc will need to implement the harsher measures agreed upon at the end of May, which would include a ban on all Russian crude oil imports from 5 December and on petroleum products from 5 February, some EU diplomats warned.

It also remains unclear at this stage whether there would need to be additional adjustment talks at the G7 level if the EU agrees a cap outside of the group’s proposed price range.

How the cap would work
When implemented, the price would apply to any ship carrying Russian oil, no matter what flag it flies.

Shipping companies would only be allowed to transport oil sold below or at the level of the agreed cap.

If a ship is found to be carrying Russian oil and not adhering to the set cap, it will lose access to services like insurance.

While the question about whether proper monitoring can be ensured remains, the EU aims to team up with key countries for maritime insurance, like the UK, to give the sanction teeth.
 

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The ruble-based MOEX Russia index hovered around 2,200 points on Thursday, trading in a tight range since November, as investors continued to monitor developments over a proposed price cap on Russian crude.

At the same time, markets reacted to Federal Reserve comments on interest rates while the Russian currency was squeezed by the end of a favorable tax payment period.

Regarding individual share price movement, Polymetal International and Mostotrest Pao were among the biggest gainers, up nearly 4% and 3%, respectively. Conversely, Rusolovo Pao dropped almost 6% to be among the top losers.

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The ruble-based MOEX Russia index closed 0.3% lower at 2,180 on Friday, dropping 0.7% on the week as EU states continued to disagree on the appropriate price ceiling for services related to the export of Russian oil.

Oil-producing giants Lukoil and Rosneft closed in the red as the outlook for the sector continued to worsen.

Despite lowering its price ceiling proposal to $60/barrel for the use of European tankers and insurance in deliveries to Asia, Poland did not sign off on the agreement as Urals oil contracts hover well below the proposed cap.

Still, tank owners have reportedly already started to charge more for the transportation of Russian crude, pressing demand for the slowing economies of India and China.

In the meantime, metallurgists erased their early gains after stronger-than-expected US payroll data lifted the dollar and hampered expectations for industrial demand for top consumer China, driving Rusal and NorNickel to drop 2% and 1%, respectively

MOEX 12 MONTH CHART
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The MOEX Russia index closed 1.2% higher at 2,207 on Monday, erasing losses from the prior week as investors digested the new price ceiling on Russian oil and assessed the initial impact of the EU’s seaborne oil embargo.

The EU set a price ceiling of $60/barrel for the use of European tankers and insurance services on deliveries to Asia, below initial proposals but well above the current market price according to Urals grade contracts at Russian ports.

Still, Moscow said it will not participate in any deals that have the cap triggered in the future.

Oil giants Rosneft and Lukoil closed 2.6% and 1.3% higher, respectively, as investors shook off concerns about how the cap and the embargo could hamper profits for oil heavyweights.

The latter also benefited from shareholders approving the RUB 537 per share dividend from 2021 and RUB 256 per share from the first three quarters of 2022.

In the meantime, metal companies rallied as easing Covid curbs in China drove base metal prices higher.

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The ruble-based MOEX Russia index closed 0.6% lower at 2,196 on Tuesday, partially erasing gains from the last session with pressure from heavyweight energy producers.

Investors continued to assess the impact that the start of the EU’s oil embargo and the G7 oil price cap may have on the Russian economy.

The EU decided on a price ceiling of $60/barrel for the use of Western tankers and insurance services on deliveries to Asia, below initial proposals but well above the current market price according to Urals grade contracts at Russian ports.

Moscow said it will not export any oil that has the price cap triggered, risking a further dent in sales and bringing exposure to older equipment and more expensive insurance.

Rosneft fell nearly 1%, while Surgut retreated 0.7%.

In the meantime, Gazprom edged 0.2% down as German energy groups Uniper and RWE launched legal proceedings against the gas giant over contract breaches in Gazprom’s supply halt this year.

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The ruble-based MOEX Russia closed 0.2% lower at 2,192 on Wednesday, extending last session's decline as the EU’s oil embargo and the G7 oil price cap threaten the highly dependent oil exports for Russia.

While the sharp decline in international oil benchmarks further decreases the likelihood of the $60/barrel price cap being triggered, higher prices charged by shippers and insurance to accommodate for risks have pressured the Urals oil flagship grade to trade at its widest discount to Brent since August.

Also, reports state that Russian authorities consider placing a price floor on exports, further risking supply and driving the sector to underperform the broader index in Moscow.

Tatneft and Transneft both closed 0.3% lower.

In the meantime, equities did not show a sharp reaction to Russian President Putin's warning that the risk of nuclear war continues to rise due to threats from the West

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The ruble-based MOEX Russia index closed below the 2,200 mark on Thursday, trading in a tight range since late October, as investors continued to monitor developments over a price cap on Russian crude.

Russia's Urals oil has been changing hands with an almost 40% discount to Brent, days after an EU export embargo came into force and the EU, G7, and Australia set a $60 price cap on Russian oil exports.

Meantime, both oil benchmarks remained under pressure amid a gloomy outlook for global growth and demand, which, among with a stronger rouble, could put Russia's oil revenues under some strain.

On the corporate side, Korshunovkiy Gok Pao and Enel Rossiya Pao were among the biggest losers, down roughly 5% and 2%, respectively.

Conversely, Sfi Pao added almost 3% to be among the top gainers.

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The MOEX Russia index closed 0.4% lower at 2,178 on Friday, declining for a fourth straight session and closing the week marginally in the red with sharp losses for energy producers and banks.

Heavyweight oil companies were set to be among the sharpest losers of the week, pressured by the darkening outlook for the sector amid the start of the EU’s oil embargo and the G7’s $60/barrel price cap on Western export services.

Consequently, Russian authorities threatened to place a price floor on exports and President Putin stated the country’s top producers could cut output.

Even though the Western price ceiling has not been triggered since market prices hover well below the cap, added risk due to heightened geopolitical tension has increased the cost for the use of tankers and insurance, dragging Urals oil prices to their biggest discount to Brent since August.

Surgut led the losses and fell 1.8%. In the meantime, investors awaited domestic price data to be released after the closing bell.

MOEX 12 Month Chart

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Good morning bigdog
rcw1 was reading an article about this... "regarding the EU’s price ceiling on Russian seaborne oil exports." How this will affect the Russian economy and their response... and how this would affect Europe with or without Chinese support.

Age brings about forgetfulness. Must endeavour to find it again, was most interesting indeed.
Anyways have a good day bigdog.

Kind regards
rcw1
Good morning,
Published this morning (12/12/22) via News Corp Media:

The European Union embargo on Russia’s oil and an international cap on the price of the country’s crude is disrupting the maritime transport sector.

The EU on Monday enforced an embargo on Russian crude shipments, the bloc’s latest sanction in retaliation for Moscow’s invasion of Ukraine.

This week also saw the start of a $US60 cap on a barrel of Russian crude, agreed by Western nations.

Aimed at depriving Russia of key income, the measures have also slowed transportation of its oil by sea.

This is because Turkey has started to request proof of insurance from tankers loaded with Russian crude, slowing their passage through the Bosphorus and Dardanelles straits and onto international markets.

The Financial Times has reported that Russia has assembled a “shadow fleet” of more than 100 vessels seeking to circumnavigate the Western sanctions regime.

These ships are reportedly using non-Western insurers and selling oil at higher prices to countries that have not subscribed to the new sanctions.

A 1936 treaty guarantees the freedom of navigation to merchant vessels passing through Turkey’s two straits.

But it also gives Turkey the right to regulate security — a provision it is now using to make sure the oil ships are insured against spillage and other accidents.

The London P&I Club, a leading provider of maritime protection and indemnity insurance, claims “the Turkish government’s requirements go well beyond the general information that is contained in a confirmation of entry letter.

Have a safe and Happy Christmas and prosperous new year.

Kind regards
rcw1
 

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The ruble-based MOEX Russia index closed 0.2% lower at 2,173 on Monday, booking losses for the fifth session and extending the slight retreat from the previous week with pressure from energy producers and metallurgists.

Heavyweight oil stocks continued to underperform the broader index after the start of the EU’s oil embargo and price cap last week, as geopolitical risks drove tankers and insurance companies to have already started charging more even though Urals oil market prices are well below the price ceiling.

Most major companies in the sector closed in the red, led by a 1.4% drop for Tatneft.

In the meantime, data from the Ministry of Finance showed that Russia’s budget surplus widened sharply in November after plummeting in the third quarter, supported by dividends and a large windfall tax paid by Gazprom on profits from soaring gas prices.

Still, the Ministry expects to finish the year with a 2% shortfall to GDP, as war spending mounts.

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The ruble-based MOEX Russia index closed flat at 2,174 on Tuesday as losses for oil shares offset gains for miners, while investors assessed the outlook for the Russian economy as expectations of lower revenues and increased war spending dent the government’s finances.

Data from the Ministry of Finance showed that Russia’s budget surplus widened sharply in November due to the large windfall tax paid by Gazprom, but officials still expect Russia to close the year with a budget shortfall equivalent to 2% of GDP.

Revenues from oil companies should drop even further amid the EU’s oil embargo and the G7’s price cap.

Oil companies continued to underperform with Transneft tanking 1.3%.

On the other hand, miners surged with Polyus and Severstal adding 3.5% each after cooler-than-expected US inflation triggered a rally in metal prices, pointing to an increased connection between Russian miners and benchmark commodity prices despite sweeping capital controls by the MOEX and CBR.

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The ruble-based MOEX Russia index closed 0.6% down at 2,160 on Wednesday, the lowest in over one month, as the Western retaliation to Russia’s attack on Ukraine continued to hamper the outlook of the Russian economy.

Data from the Ministry of Finance showed that Russia’s budget surplus widened sharply in November due to the large windfall tax paid by Gazprom, but officials expect Russia to close the year with a budget shortfall equivalent to 2% of GDP.

Revenues from oil companies should drop even further amid the EU’s oil embargo and the G7’s price cap.

Oil giants Rosneft and Surgut both closed 1% lower, leading oil companies to continuously underperform the broader index.

While trading marginally in the red, miners continued to outperform the Russian market with the benefit of higher demand projections for base metals, pointing to an increased connection between Russian miners and benchmark commodity prices despite sweeping capital controls imposed by authorities.

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The ruble-based MOEX Russia index closed 1.5% down at 2,127 on Thursday, the lowest in seven weeks, as investors continued to worry about Russia’s worsening economic outlook.

Data from the Ministry of Finance showed that Russia’s budget surplus widened in November due to the large windfall tax paid by Gazprom, but officials still expect the government to close the year with a budget shortfall equivalent to 2% of GDP as war spending continues to press public finances.

Revenues are also likely to decrease as the start of the EU’s oil embargo and the G7’s price cap to allow for shipping services has reduced prices for Russian energy exports.

Consequently, oil shares dropped 1.5% in the session and over 4% since the start of sanctions on December 5th.

In the meantime, metallurgists halted their recent rally and tanked more than 2% on average, led by a 3% slide for Norilsk Nickel.

Tomorrow, the CBR is expected to hold its interest rate steady at 7.5%, as previously signaled.

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The ruble-based MOEX Russia index pared earlier losses to close slightly higher at 2,130 on Friday, supported by a 1.3% jump for Lukoil and 1% advance for Rosneft ahead of the former’s ex-dividend date next week, while investors shook-off warnings form CBR Head Nabiullina after the central bank’s policy decision.

The Central Bank of Russia held its key rate unchanged at 7.5%, as previously signaled.

The bank stated that pro-inflationary risks are prevailing as the military mobilization hampered the labor force and hurt capacity, reducing the likelihood of future rate cuts.

Inflation is also supported by unfavorable terms of trade brought by Western sanctions on Russian oil exports, pressuring the ruble.

Oil companies enjoyed some respite and averaged gains for the first session in eight.

Still, the extended losses for oil producers since the start of the EU’s embargo and the G7’s price cap pressured the MOEX index to close the week more than 2% lower.

MOEX 12 MONTH CHART
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The ruble-based MOEX Russia index closed marginally lower at 2,130 on Monday, paring the slight gains from the prior session and approaching the eight-month low touched last week as the decline for energy producers and banks outweighed gains for miners.

Gazprom shares slid 1.4% after the European Union approved a price ceiling for TTF benchmark natural gas contracts at EUR 180 per megawatt hour. Still, the cap is well above current market prices.

Oil shares also fell sharply as lower global demand and the EU’s oil embargo pressured Urals oil benchmarks to remain close to 23-month lows.

On the other hand, steel producers challenged lower international base metal prices and traded in the green, led by a 3% jumps for MMK and Novolipetsk.

Meanwhile, the broader index is expected to decline in the next session as heavyweights Sberbank, Gazprom, and Lukoil will be trading ex-dividend.

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