Investors Expect Coronavirus Crisis to Peak in Late-May: BCS Premier

Russian investment professionals said in a poll by BCS Global Markets this week that they expect the effects from the COVID-19 outbreak on the Russian economy to peak in late-May, while seeing oil prices at $40 per barrel by the end of the year, bne Intellinews writes

Unconfirmed reports have claimed that strict lockdown measures in Russia, which have virtually paralyzed the economy, are likely to be prolonged until at least mid-May/beginning of June.

Over 600 equity and fixed income clients were polled. As for the most important question for the Russian investor – the outlook for the price of oil – a near consensus among all respondents was that prices would gain 35-40% from the average spot price for April 8-18 to $40+ per barrel by year-end. However, it must be noted that the results precede the most recent historic plunge of oil prices into negative territory.

The safer equity play choices in the current environment are seen in utilities, telecom (TMT), gold, and retail segments, while transportation, oil & gas, and banking are viewed as the riskiest.

On financial indicators, equity investors now see about 5-10% downside in the RTS index by end-2Q20, whereas corporates see it 5-10% higher.

“Utilities are loved by local investors and fixed-income funds, while TMT is a consensus Top 3. On the negative side, we note transport, banking, and oil,” BCS GM wrote.

At the same time, the retail investment audience is much more cautious about recovery timing, while the corporates (in utilities, telecom, metals, and mining) feel lower COVID-10 impact, and big companies, in general, feel safer than their smaller sector peers.