ITI Capital: Top picks on Russian financial market

30% based on 52-week highs seen in early October 2021.In the case of the second-tier stocks, like X5 Retail Group and Rostelecom, the upside is much higher, around 50%, based on 52-week highs seen in February-March 2021.

Softline is one of the few private and non-government related IT companies on MOEX exchange that trade with a big discount to its recent highs.We assume that the blue chips could reach the target in the coming few months, while it will take longer for the second-tier stocks.

This outlook is justified if the positive momentum of negotiations and framework agreements between Russia/Europe/Ukraine/USA remains in place, which will ensure security at least in the medium term.

Long-term risks, and hence the risk premium, are likely to remain, though much lower, closer to pre-crisis levels.The target for the USD/RUB is ₽69-70/$, that is 8% below current levels, assuming going short on the dollar against the rouble, and the target is highly likely to be met in the near term under the above conditions.