The Russian stock market on a 17-week decline: analysis and forecasts
The Russian stock market is experiencing a prolonged correction that has lasted for 17 consecutive weeks. During this period, the index has corrected by almost 25%, which suggests not a slow decline, but a pronounced bearish trend. The question of whether the bottom has been reached remains open, and most analysts are not rushing to make optimistic forecasts.
The Bottom is Not Near: What Experts Say
The current situation is characterized as a "bear phase," where the market declines without obvious negative news. The main reason is the lack of buying interest. The likelihood that the bottom has already been passed is extremely low, and the decline is likely to continue in the next three months. The expected reduction in the key rate in the second half of the year is unlikely to become a powerful catalyst for growth — its magnitude, apparently, will be insufficient for a radical shift in sentiment.
Dividend payments, traditionally considered a driver, may only slow the decline under current conditions, but not reverse the trend. After dividends are credited, selective purchases are possible, but their volume will be insufficient for sustainable growth. New IPOs before the end of the year are likely to be more of a "lifeline" for companies that are going public not for development, but to refinance debts. Such placements are unlikely to attract long-term investors.
Key Drivers of the Second Half of the Year
The main factor determining market movement remains the economic situation and the dynamics of the key rate. If there are no significant changes on the geopolitical front, the rate will have a decisive impact on investor sentiment in both the bond and stock markets. Dividend-paying companies, especially those offering yields at or above the key rate, will attract attention, but their growth potential is limited — they may perform better than the market but will not be able to reverse the overall negative trend.
Experience in recent years shows that virtually no equity placement has brought profits to investors, and most stocks trade below their offering price. High uncertainty regarding the rate will significantly reduce the number of companies willing to go public.
Tokenization and Strategy for Investors
Interest in tokenizing stocks through crypto infrastructure is met with skepticism. The main issue is the accounting of rights. Owning a token does not equate to owning a share registered in the registry. This format is more suitable for gray capital and carries significant risks, especially for large portfolios. For small investors, it may be more interesting than direct exchange trading, but for institutional players, the risks outweigh the benefits.
Recommendations for a private investor with a 2–3 year horizon look like this: the portfolio's foundation should be bonds, primarily short- and medium-term OFZs. Stocks should only be a small portion, with careful and regular purchases, as it is unknown in which year the bottom will be reached — this year, next year, or in three to five years. Gold is definitely not recommended as a non-investment asset. Cash is acceptable as a waiting position, placed in deposits or repo transactions.
My professional view: The Russian market is in a phase of structural revaluation, and the current correction is not just a cyclical phenomenon but a reflection of fundamental changes in the economy. Investors should prepare for a prolonged period of low returns and high risks, rather than searching for a "bottom" for aggressive purchases.