Market Analysis

Russian stock market: in the context of gravity

Today's beginning of the trading on the Russian stock market, despite the negative external environment, it took a neutral stance, about yesterday's closing prices. But already during the first minutes of the trading investor optimism evaporate. The settling of a quotation with the continuation of crude oil and European stock pads Russian stocks continued to fall in price rapidly. At the moment, the main Russian blue chips on yesterday's closing has traded steadily in the red. As of 13.20 Moscow time the main indicators of the Russian market, the MICEX and RTS indexes are in negative zone, losing 1.3%, respectively (884.57p.), And 3.04% (858.07p).. Yesterday's trading ended on the ocean neutral. At the end of the trading, Dow Jones, despite the encouraging macroeconomic statistics from the labor market (a significant reduction in the primary applications for unemployment benefits), rose to the symbolic 0,058%, to close at 8,183.17 point p, a broad market indicator S P500 gained 0,355%, while its value on the closure of section 882.68 dynamics futures index data, is an indicator of investor sentiment at the opening of the American market at the moment is moderately negative. Current value on the Dow futures are in bekvordatsii 20 points or 0.25%. Let me remind you, yesterday became aware of a significant reduction in the number of initial claims for unemployment benefits in the United States, which significantly exceeded analysts' expectations. Despite the fact that these figures are optimistic, and unexpected, the U.S. stock market had virtually no reaction to the statistics. In our view, the weakness of the U.S. market due to negative expectations of the corporate reporting season.

Quotations black gold in response to the negative sentiment in financial markets continued to decline rapidly, indicating a sharp drop in speculative market demand for raw materials, which is the sole reason for the persistence of high oil prices in a global recession. Thus, the current values of oil futures to near ekspiratsiey of Brent-WTI and have already represent, respectively, 60.78 U.S. $ /bbl and U.S. $ 60.01 /barrel, about U.S. $ 1.5 lower than yesterday's values.

The pressure on the oil market continue to have the intention of the U.S. regulator to curb speculation in the oil market. At first glance, the good intentions, but they can lead to a substantial drop in the interest of speculators in the oil market. At least, such an example of such иже consequences already exists in the nickel market, which after the imposition of limits on speculative positions, lost a significant part of liquidity and well-established long-term downward trend in the decline of interest in this metal speculators. We expect that pressure on oil futures by speculators selling will continue, and in the near future do not exclude the test mark 60 dollars /barrel to exit down.

With regard to quotations of Russian blue chips, then at 12:55 Moscow time the major Russian blue chips continue to decrease. For example, shares of Lukoil lost 0.38% (EUR 1305), Surgutneftegaz 1,21% (19,49 EUR), Gazprom 0.64% (136.71 EUR), VTB 0,6 % (0.0328 USD). Worse than the market looks Sberbank, declining to 2.65% (35.23 EUR). The exception in the market today are the shares of MMC Norilsk Nickel and Rosneft, added, respectively, 0.79% (2625 EUR), and 1.55% (159 EUR).

Among the major domestic news today can be the deployment of additional issue RusGidro, raising the domestic price of pipes metallurgists, as well as winning Alfa Bank claims to the GAS .

Placing additional issue RusGidro at a price below the market consensus forecast of fair-price could adversely affect the fundamental value RusGidro stock quotes and company. In the course of the additional issue RusGidro on the right of priority have been redeemed 7.2 billion of additional shares at a price of 1 ruble placement, or 45% of the total additional issue. RusGidro places on public offering 16 billion shares. The priority right to act in the period from 19 May to 2 July 2009. During this period, shareholders RusGidro able to apply for the acquisition of additional shares in proportion to its share in the authorized capital of the company. The main purpose of the additional issue was the introduction of the State in the capital of the company to finance the investment program RusGidro.

Following the implementation of the remaining preference shares additional issue will be able to buy a wide range of investors. We believe that investors will show interest in buying shares RusGidro. First, the cost of placing shares at 17% below market. Secondly, in recent times there has been favorable news background of the company. At the same time as the price below market and below-consensus forecast of a fair price, we believe that placing the additional issue will have a negative impact on the fundamental value RusGidro and stock quotes, company.

Since early July, just a number metallotreyderov raised the prices of welded tubes by 1-3% against the backdrop of the emergence of signs of reviving demand. Taking into account the development of positive trends in the global steel market and the seasonal increase in demand for tubular products companies, we expect further growth of prices for pipes. We believe the positive news coming for the entire pipe segment and, in particular, for TMK, but currently we do not have a formal recommendation on shares of the company.

Alfa Bank won the suit to the two companies of the GAS, which gives the bank an opportunity to make claims about their bankruptcy. We believe that, given the small amount of the claim, the GAS will be able to repay this debt. Regarding the disagreement Alfa-Bank to restructure loans, even with the use of gosgaranty, we do not exclude their refinancing through the State Bank. We appreciate the news as negative. Agreement to restructure the debt with the gosgaranty 20 billion rubles have already been received from 11 of the 12 banks. The position of Alfa-Bank could nullify all agreements with the banks and the state. The Bank is not satisfied that gosgarantii provided only half of the loan amount. In his view, there is a risk that upon expiration of the restructuring of the company once again can cause problems with the performance bond. Given the position of the State on the need to preserve the business of the GAS, we believe that the Alfa-Bank loans can be refinanced with the participation of the State Bank.

As regards the situation as a whole in the market, then at this point, we believe the likelihood of continuation of correction is high. At this point in the segment of blue chips we do not see the prerequisites of development growing trend in any of the shares in the segment. We are still suggest to stay away from speculative long positions on the most liquid Russian stocks in a correction to the acceleration of the Russian stock market. With respect to the shares of the secondtier, in this segment, we also recommend that you lock in the profits of Peak, rampant and Severstal, increasing the amount of cash position in the segment. But we are still retains a positive view of the long-term prospects for shares in companies small and medium-capitalization, with a stable business model and a low debt load and recommend to hold the position long-term data on shares of issuers in the portfolio. Among them we note the actions of three growth potential on the horizon of 1-2 years old: Kuzbassrazrezuglya, Bamtonnelstroya, IDC Holding and prefy sylvinite.

Kievenergo explains the limitation of the hot water 3 districts of Kiev routine test heat
Recommendations on shares of Gazprom, Lukoil, Rosneft, Sberbank, VTB and MMC Norilsk Nickel
A possible driver for the Russian market is closer to the end of bidding will measure consumer sentiment index
The Russian stock market continues downward movement
Since July 13, 2009 Bank of Russia reduces the refinancing rate at 0.5 percentage points - up to 11% per annum
Yesterday, a pair of Euro /dollar continued to increase in the U.S. session and reached 1.4070
Overview of the oil market for 09.07.09
U.S. futures indices levels the positive effect of closing the stock market
Export duty on crude oil in Russia from August 1, could grow to U.S. $ 220-224 /t

News and Comments