Moscow Exchange: Saving for a rainy day (stays HOLD)
We continue to rate Moscow Exchange (MOEX) a HOLD, and set our new 12M price target (PT) at RUB 115 (from RUB 118 previously). We still see MOEX as a vertically-integrated platform with a balanced mix of businesses, allowing the delivery of strong F&C income under both favourable and unfavourable market conditions. Furthermore, we highly appreciate management’s focus on introducing new instruments in order to increase the attractiveness of the platform. The change in our PT stems from insignificant adjustments in our 2018-19E earnings forecasts. We have also raised our dividend payout assumptions to 90/85/85% for 2018-20E (from 70%) as, contrary to our initial expectations, management has proved its commitment to progressive dividends. On the other hand, we are still concerned about the impact of the implementation of the Unilateral Collateral Pool (UCP) on interest income in 2018-19E. Overall, we would open a position in MOEX once we see that higher F&C is capable of offsetting any loss in interest income. Overall, the current valuation looks fair to us currently. On our estimates, MOEX trades at 2018-19E P/Es of 11.5-10.4x, c.40-50% discounts vs. its peers.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.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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