Russian billionaire Mikhail Fridman must have been pleased to see positive results from his X5 Retail Group, traded on the London stock exchange. No doubt, Russians may be worried about the effect sanctions will have on their economy, but X5 shares rose 4.8% to $20.80, the highest level since mid-July. The stock has gained 24% for the year, the highest increase of Russian companies traded on the London stock exchange.
Disposable incomes in Russia rose 2.3% for July, compared to a loss predicted by analysts. The strong performance of the supermarket chain is seen as a positive indicator for health of the Russian consumer, although as we all know, everybody needs to eat. Often the performance of high-end or luxury retailers would be an indication of the spending power of a population, but the increase in Russian’s disposable income is a good sign for Russians, including Mikhail Fridman. However, perhaps it will take a quarter or two to really see what impact sanctions are having. Disposable incomes may be rising, but retail growth overall in Russia was its lowest since 2010, which is an indication that Russians might not be disposing of disposable income, but saving.