Moscow Exchange - Close Short Trade Idea

We are closing our trade idea to short Moscow Exchange (MOEX) relative to Russian financials, which we opened on April 10, 2019. Since inception, MOEX has returned 2% in dollar terms, compared with a 3% gain by Russian financials. We are closing this trade as we feel that most of the negative near-term drivers that we flagged at inception have played out, including weak 1Q19 trading data and subdued client fund volumes. Tomorrow, MOEX will publish its June trading update, and we think the market may if anything be positively surprised by what should be a decent uptick in client funds, as Russian companies have started paying out record dividends. Although the pickup in June-July around dividend season happens most years, we don't think this is fully priced in, and if anything we see near-term upside risk for the stock. Another near-term tailwind is better than expected fee income dynamics, the sustainability of which the management sounds fairly upbeat on. Looking slightly further out, there is also hope that with a new CEO on board, some of the risk management issues (which resulted in provisions) of the past year or so are on their way to being behind us.