An impossible strategy

The coming year could be the Russian stock market turning point: either will set the stage for further growth, or it will be a year of continuing crisis. What will happen depends not only on the actions of financial authorities, but on how to feel the world economy and especially at what level will stabilize the price of oil. And, as noted by the Head of Research at Alfa Bank, Ronald Smith, the bank generally will not make a strategy for 2009. The strategy for 2009, the Bank of Moscow "The worst has already happened," says that this year, realized the most negative scenario of all the possible and the stock market, as it should, anticipate this scenario (the collapse of Russian stocks has occurred in August and September, when the economy was still in decent shape). "The stock market always moves ahead of the economic business cycle and most likely its lowest point has already passed", - analysts said the bank. According to analysts, the Bank of Moscow, the Russian economy is experiencing a normal cyclical downturn, which happens at intervals of 7-11 years. According to analysts, the industrial sector is already almost at the bottom, and the business cycle reaches the lowest point in the next three to six months. The speed of recovery will depend on how quickly normalize the global credit market and what will be the price of oil. As noted in the review, depending on these factors, we consider two models for further development in 2009: base (oil prices - $ 60 per barrel, GDP growth - 2,5%, the dollar / ruble - 30) and alternative (40 U.S. ., 0%, 35 respectively). The first scenario gives a fair estimate for the RTS index at year-end 1100 points, second - 900 points. IG analysts at Renaissance Capital in the strategy for 2009, "Life goes on?" note that in the first half, the Russian stock market was part of the dynamics of the five best in the world, but by the end of the year was one of the worst. However, analysts believe it is possible that in 2009 the speaker of the Russian market may be one of the best in the world. The survey says that even if oil price of $ 40 per barrel assessment of Russian assets remain attractive. In a review of IG Renaissance Capital, said that in response to the crisis the government will make two important steps: to maintain the income will be increased salaries of public sector employees and the authorities will go to a more flexible currency policy. "We expect that in January-February 2009, the regulator will allow the Russian currency exchange rate to fall to a minimum next year - 32 rubles per dollar," - says the strategy at Renaissance Capital. In the first quarter growth rate of the Russian economy will be zero or negative, in the second situation will stabilize in the third will be felt more and more favorable effect of devaluation, and the fourth is going to be a period of strong recovery. By the end of next year, the market may well reach the mark of 1100 points on the RTS index, which implies a 75 percent increase from today's levels, although more than half the value in June of this year. In turn, the review of "Iskra" Troika Dialog, says that, before the market will have an opportunity to realize their potential, should vanish uncertainty associated with the weakening of the ruble, a recession in the world and the development crisis in the fragile economies of Eastern Europe: "While these issues are resolved, we will not argue that the market has bottomed. " However, according to the company's target level for the RTS index at the end of 2009 - 1000 points (based on the assumption that the price of oil is 55 dollars per barrel, lower exchange rate - 20%, the equity value of Russian companies - 16%). "This is an equation with many unknowns. Index may fall to 350 points if the global recession will develop into a depression, or to reach 1500 points, if global economic growth will accelerate," - said in a review of Troika Dialog. If the stock market can still count on growth in the next year, to revive the debt market can only hope at the end of next year. As noted by the chief of the analysis of debt instruments at Troika Dialog, Alexander Kudrin, it is unlikely 2009 will be a turning point for the debt market. To date, buyers of Russian bonds are either EBV and NPFy or issuers themselves: "These investors appear only when they realize that the devaluation will be no more." As stated in the strategy for 2009, Trust Bank "survive on!" Ruble-denominated bonds in a stable ruble depreciation, capital flight, high inflation and frequent defaults remain boring for a long time. Landmarks profitability remain high - at least 13-15% for the first tier, and 20-30% for high-quality papers of the second. Market uncertainty makes it difficult to forecasting the next year. As the director of analytical department of Alfa-Bank Ronald Smith, the bank generally will not make a strategy for 2009. "Too much volatility. Meaning is not currently predicted, while the price of oil will not reach a stable level," - he says.