Stock market overview for April 1, 2021

The last trades of March finished on the plus side. Leaders of growth among the most liquid were (VTBR 0.04263, +6.95%). The outsiders were (TRNFP 146,550, -2.80%). The USD/RUB pair traded near 76.

The Ministry of Finance sold off OFZs. Investors bought out the entire available volume at the placement, which amounted to 354 billion rubles. Demand exceeded supply by 20-40%. The earlier seemingly failed quarterly government bond offering plan was fulfilled by three quarters. We believe the demand was generated by the big banks, while non-residents' participation was minimal. Interest in buying OFZ was generated at the background of the notable difference between their yield and the repo rate. In fact, financing the purchase of papers is cheaper than the yield on them, provided the OFZ price does not decline. We believe that on the horizon of two months the risk of an increase in the key rate and a drop in OFZ quotes is low, so the auctions will be in demand for some time.

Participants of the OPEC+ deal will determine production levels in May. Last night came the news that in France there is a quarantine for three weeks with the prospect of its extension until the situation with the disease COVID-19. Against this background there was a sharp drop in the price of oil to the region of $62 per barrel. We believe that the quotas will not be revised. In case the epidemic situation in Europe does not stabilize, oil will continue to fall in price, but its production reduction is unlikely.

(GAZP 228.25, +1.03%, spec. buy, target: 240 rubles). From the technical point of view, a rebound of quotations to the upper border of the upward corridor is likely. The growth driver is the increase in price and demand for gas after the weakening of the quarantine in Europe. The company promises to complete Nord Stream-2 soon.

We expect a sideways trend. Oil and gas sector shares will be the outsiders. USD/RUB: 75.00-76.00 range. We expect the Moscow Exchange Index to spend the day in the range of 3500-3550 points.

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