Moscow Exchange confirmed at BUY, TP RUB 150 - Strong year carries on
In view of exceptionally strong yoy operating statistics this year, we confirm our BUY recommendation for ordinaries and raise our DCF target price to RUB 150 from RUB131 on the back of lower risk-free rates. The business segments of Moscow Exchange look well-balanced against business cycles long-term, yet the company benefits from anything out of ordinary raising market volatility and trading, thus boosting fees, such as the pandemic or oil market panic. Furthermore, lower interest rates are also beneficial for top line growth and especially the lucrative Securities segment. Based on 1H 20, equity trading more than doubled yoy, derivative volumes grew by ca. 60% yoy, the Money Market was up by 15% yoy and FX Spot grew by almost 40% yoy. If this continues on at the same pace, 2020e fees could jump by almost 25% yoy, above the 10% CAGR target. Though we cautiously assume aMoskovskaya Birzha MMVB-RTS PAO. Moskovskaya Birzha MMVB-RTS PAO (MMVB-RTS OAO) is a Russia-based integrated stock exchange that provides electronic trade organization, clearing and settlements on trades, depository and information services. The Company provides trading and settlement services in such segments of the financial market as foreign exchange (FX) market, federal bonds market, market of derivative financial instruments, cash equities market, corporate and regional fixed income market, commodities market, as well as market for state and municipal orders. The Company was established as a result of the merger between MMVB ZAO and RTS OAO. It operates through six branches and three representative offices. As of February 27, 2013, the Company's major shareholder was the Central bank of the Russian Federation with a stake of 22.47%. In January 24, 2014, the Company sold its whole stake in MMVB-IT ZAO.
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