The Russian stock market is in its 17th week of decline: analysis of the situation, drivers, and forecasts
The Russian stock market is experiencing a prolonged correction that has lasted for 17 consecutive weeks. During this period, the index has corrected by nearly 25%, and experts are in no hurry to declare a bottom. The current situation cannot be called a "slow fade"—it is a full-fledged bearish trend that continues to develop.
According to analysts, the market is in a "bear market" phase, where prices decline without clear negative news. The main reason is a lack of demand: investors simply do not want to buy stocks. The decline is likely to continue over the next three months. The expected reduction in the key interest rate in the second half of the year may not be as positive a factor as many hope.
Dividends and IPOs: Not Growth Drivers, but Brakes on the Decline
Dividends, according to several experts, currently act not as a growth catalyst but as a factor slowing the decline. After payouts, selective purchases are possible, but their volume is insufficient to reverse the trend. As for new IPOs, they are likely to serve as a "lifeline" for companies that are listing not for development but to salvage their finances. In such conditions, buying their shares is unjustifiably risky.
The key market driver in the second half of the year will remain the economic situation and, above all, the key interest rate. It is currently having the greatest impact on investor sentiment. Dividend-paying companies with yields comparable to or exceeding the rate will perform better than the market, but strong growth should not be expected from them. Experience in recent years shows that virtually no IPO has generated income for investors, and most stocks trade below their offering price.
Tokenization, Strategies, and Recommendations for Investors
The surge of interest in brokerage apps is linked not to an influx of retail investors but to restrictions from Russia and foreign platforms. Experts are skeptical about tokenizing stocks through crypto infrastructure. The main issue is the accounting of rights: owning a token does not equate to owning a share in the registry. This format is seen more as an opportunity for "gray" capital and as a high risk for the American system.
For a retail investor with a 2-3 year horizon, the following strategy is recommended: the portfolio's foundation should be bonds, primarily OFZs (short and medium-term). Stocks should only be a small portion, with careful and regular purchases. Gold is definitely a no—it is not an investment asset. Cash is acceptable as a waiting position. Cryptocurrencies, according to several experts, remain an extremely toxic asset over a 10-year horizon, especially amid the development of AI and the construction of large data centers in the U.S., which could make crypto wallets vulnerable.
Commentary from Cryptalist analyst: The current situation in the Russian market is a classic example of a "bear market," where the absence of positive catalysts is exacerbated by high rates and geopolitical uncertainty. Investors should prepare for a prolonged period of low returns and shift their focus to conservative instruments. Active stock purchases now are a long-term game with an uncertain payback horizon.