Retail Investor Statistics - Record Flows into Stocks in June
Moscow Exchange has published the June statistics on retail brokerage accounts. Individual investors bought R65.1 bln ($950 mln) worth of stocks over the month, which is the highest number on record. Retail investors also continued to put money into mutual funds. Russian asset managers saw inflows of R14 bln in June. Part of this money went into the bond market, although we estimate that around half was invested in equities. This brings the size of inflows into the local market to $1.05 bln.Given that the market barely moved in June (RTS edged down 0.6%), other market participants - companies and foreign investors - would have had to sell an equivalent amount of stock. Companies or their shareholders placed $800 mln worth of stock (Yandex, Detsky Mir, Polymetal) during the month, while the remaining $250 mln appears to be outflow from foreign institutional investors.The Moscow Exchange also publishes an aggregate portfolio of the top 10 stocks held by retail investors. In June, Gazprom and Sberbank retained their number one and two positions, while Nornickel rose to third place with a 12.5% weight. The recent increase in Nornickel's weight has been massive. Since April, retail investors have essentially doubled their exposure to the stock. Local investors, who tend to be much less sensitive to ESG considerations and are always willing to buy on the dip, absorbed the selloff in Nornickel after the environmental disaster. However, given that the stock is already a big part of retail portfolios, we would highlight the risk that the capacity of retail investors to absorb any further selling in Nornickel stock may be limited.Another interesting observation is that Yandex disappeared from the top 10. This is probably a result of the stellar performance of the stock, after which local investors most likely started selling when foreign funds were buying.The relentless flow of money from retail investors is a big support factor for the market. It allows an increased supply of stock by companies to be digested and offsets any outflows from foreign investors. Once the foreign outflows stop, the retail factor will likely continue to push the market higher.Detskiy Mir PAO is a Russia-based company, which is primarily engaged in the children products retail sector. The Company offers a wide range of products, such as toys, clothing and footwear, baby goods, stationery, school and learning related products, creative kits, sport related products, food, car seats, furniture, among others. The Company's structure includes the chain of stores Detskiy Mir and the retail network ELC (Early Learning Center). The Company's Detskiy Mir chain comprises over 480 stores located on the territory of the Russian Federation and Kazakhstan, as well as more than 40 ECL stores. Detskiy Mir PAO is primarily active domestically and in the Commonwealth of Independent States (CIS) countries. In addition, the Company sells products online via its Website. The Company's major shareholder is AFK Sistema PAO.
MMC Norilsk Nickel PJSC is a global producer of nickel, palladium, platinum and copper. Co. also produces by-products, such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulfur. Co. is involved in prospecting, exploration, extraction, refining and metallurgical processing of minerals, as well as in production, marketing and sale of base and precious metals. Co.'s production facilities are located in five countries: Russia, Australia, Botswana, Finland, and South Africa. Co.'s production units are integrated and include: the Polar Division (the Taimyr Peninsula); and the Kola Mining and Metallurgical Company (Kola MMC or the Kola Peninsula).
Moskovskaya 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.
Polymetal International is the ultimate parent entity of Polymetal Group, a precious metals mining group operating in Russia, Kazakhstan and Armenia. Co. has five reportable segments: Magadan; Ural; Khabarovsk; Kazakhstan; and Armenia. Each segment is engaged in gold, silver or copper mining and related activities, including exploration, extraction, processing and reclamation.
Yandex is an internet and technology company that operates an internet search engine in Russia. Co. builds intelligent products and services powered by machine learning. Co.'s products and services are based on complex, unique technologies that are not easily replicated. Co. generates substantially all of its revenues from online advertising. Co. also generates revenues from its e-commerce offerings, classifieds and e-hailing service. Co.'s businesses are organized in the following operating segments: Search and Portal; E-commerce; Taxi; Classifieds and Experimental businesses.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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