The Russian stock market is in its 17th week of decline: where is the bottom and when to expect a reversal
The Russian stock market is experiencing a prolonged correction that has been ongoing for 17 consecutive weeks. During this period, the index has corrected by almost 25%, and this is certainly not a "slow decline" but a full-fledged bearish trend. Analysts agree that the current situation is not stagnation, but a pronounced decline against the backdrop of a lack of positive news and the predominance of pessimistic sentiment among market participants.
The Bottom Has Not Been Reached: What the Numbers Say
Despite the scale of the decline, it is premature to assert that the bottom has already been passed. In the next three months, the decline will likely continue. The key pressure factor is the high key interest rate, which remains the main brake on the stock market. Even a possible rate cut in the second half of the year, according to estimates, is unlikely to become a super-positive driver for a reversal.
Dividend payments, traditionally considered a support, in current conditions rather play the role of a shock absorber than a catalyst for growth. After they are credited, targeted purchases are possible, but their volume will be insufficient to change the trend. New IPOs expected before the end of the year also do not inspire optimism: many placements follow a "lifeline" scheme, where companies go public not for development but to patch financial holes. The practice of recent years shows that most of these securities trade below the placement price.
Tokenization, Brokerage Apps, and Investor Strategy
The recent surge of interest in brokerage apps is not so much related to an influx of new retail investors as it is to restrictions on external platforms. No real organic growth in interest in the stock market is recorded. As for the tokenization of shares through crypto infrastructure, a high degree of skepticism remains here. The main problem is the accounting of ownership rights: being a shareholder in the register and a token holder are fundamentally different stories. Tokenization could become a tool for gray capital, but for large institutional players, it carries more risks than advantages.
Recommendations for the Conservative Investor
Over a horizon of 2–3 years, a reasonable strategy involves shifting the focus toward the debt market. OFZs (federal loan bonds), especially short- and medium-term ones, should form the basis of the portfolio. Stocks should only be a small portion, with regular but cautious purchases, since no one knows in which year the bottom will be reached: this year, next year, or in 3–5 years. Gold in current conditions is an absolutely non-investment asset, and cash is only permissible as a temporary wait-and-see position, placed in deposits or repo transactions.
My analysis: The Russian market is squeezed between tight monetary policy and the absence of internal growth drivers. As long as the key interest rate remains high and the geopolitical backdrop is uncertain, any attempts at a reversal will be local in nature. Investors should prepare for a prolonged period of consolidation and bet on capital preservation rather than aggressive growth.