Market Analysis

Russian Stock Market: krahofobii no

By 11:50 Moscow time the Russian stock indices show a significant decline: RTS (-3.17%), MICEX (-1.93%). Opened in negative zone with a nearly 3% of th break down, the Russian platform balance at these levels on a background of moderately negative dynamics of European stock exchanges. English FTSE losing 0.48%, French CAS40 is reduced by 0.73%.

pessimism players contributed to the opening of yesterday's closure of U.S. indices in the negative zone. Dow Jones closed at 8163.6, paragraph mark, which corresponds to reduction of 1,94%, S P500 at 881.03 p. (-1.97%). Due to falling metal prices and the collapse of oil quotations to $ 62 a barrel. It also scares the market players coming reporting period, U.S. corporations, which can bring unpleasant surprises.

In the energy market on Wednesday, prices virtually unchanged after declining the previous day and the price of the nearest futures contract for WTI crude oil grade is 62.16 U.S. $ /barrel.

All Russian blue chips at 11.50 Moscow time together reduced. Quotations most liquid shares on the MICEX as follows: Gazprom - 141.68 EUR (-2.25%), Lukoil - 1305.00 EUR (-1.51%), Rosneft - 157.99 EUR (-2.78%) MMC Norilsk Nickel - 2562 EUR (-2.29%), Sberbank - 36.51 EUR (-1.88%), VTB - 0.0342 EUR (-1.72%), Rusgidro - 1,209 rubles (-1, 71%). In the second echelon also decreased across the spectrum of securities.

Recent important publications emphasize the following:

crisis committee headed by the first vice-premier Igor Shuvalov, endorsed the provision of government guarantees for the GAS at 20 billion rubles. A decision has not yet been signed, as well as in accordance with general rules, the gosgaranty may not exceed 10 billion rubles.

We appreciate the news of gosgaranty the GAS in that amount as a positive. We expect that when gosgaranty to the extent all banks agree to restructure the debt company. Terms of debt restructuring, negotiated with the banks, as follows. The company received a syndicated loan to refinance its debt. Interest paid on the loan begins six months, but the amount of principal debt - in two years. The rate on the loan amount to 17% per annum and will be reviewed annually. Taking into account the financial condition of the company, this rate can be considered low.

The estimated fair value of 1 ordinary shares in OAO GAZ is $ 22.6.

July means of VTB rose by 30% or 260 billion rubles. Such high growth is due to the fact that the bank is an agent of Transneft, Rosneft and the Chinese loan. About 70% of raised funds were placed in current accounts, while the remaining 30% - on time deposits.

We believe that the news about the source of the increase of enterprises VTB will be positively received by the market. It is hoped that at least part of received funds will go to the normalization of the structure of liabilities, and they will not be fully spent on the implementation of government regulations on lending.

Our 12-month target price of 1 ordinary share of VTB at $ 0.0016, recommendation - Keep

Further dynamics of Russian sites will be determined by oil prices and the movement of U.S. stock indexes, which in turn will be determined by records of corporations. It is important to remember that oil quotes and the Russian indexes are in the medium-term descending trend. But, in spite of the vast drop in quotations of oil futures on the Russian market is no panic, which can be attributed deleveredzhem, which was held in the previous decline, and the large number of open shorts, which need fixing arrived, and players use a motion down for that. In this regard, we consider possible technical corrective rebound Russian sites to the nearest resistance levels on the MICEX index in the region of 950 points.

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