• Russian stock market daily evening report (August 25, 2015, Tuesday)


    Market today. The decision of the PBC on a new easing of the monetary policy via cutting the key rate and required reserves norms for the banks was the global positive for global exchange grounds. At that, the commodity markets were involved too and reacted with price adding.

    Having started the practice of easing the monetary policy in November 2014, for the recent months China has applied given method several time already. However, given has not succeeded earlier. Preliminary PMI Manufacturing for August was most expressive having launched a wave of selloff at global grounds. However, we do not exclude that in terms of the current turbulence, the markets took the given news extremely positively. Therefore, we do not exclude that positive at the markets might continue for a while, especially if considering a great selloff for the past few days.

    Recently oversold stocks were adding most at the Russian stock exchange today: Mechel (+9%), Inter RAO (+3.6%), Surgutneftegas (+3%). Oil exporters were underperforming as earlier given names were benefitting from dollar strengthening: Akron (-5%), NLMK (-3.2%), PhosAgro (-2.6%) and Norilsk Nickel (-1.3%).

    BoD of Uralkaliy has approved the new buyback program, which provided for the company buying its own GDR for 16 USD and shares for 3.2 USD. Within the closest outlook, the company’s stock will be trading near given values.

    Market tomorrow. We assume that the positive reaction caused by the decision made by PBC regarding the monetary policy might stay in force for the recent days, as the majority of indices stays below thee Friday close levels. As for the most important releases of Wednesday, we would like to outline the stats on reserves and volumes of oil extraction in the US and the result of the revision of MSCI Russia 10/40.


    Market today. Oil bounce supported by the easing of the monetary policy of CB of China allowed the Russian market to win back the Monday loss. OFZ added about 50 bps, yield dropped 20-30 bps. At the meantime, inactive buying went in the loans Bashneft MB-5, Alrosa MB-2, and Gazprom K-6. Eurobonds added about 70 bps. Russia-43 grew 170 bps to 89.5% of the nominal, Russia-23 – 110 bps to 93.2% of the nominal

    Market tomorrow. Wednesday the participants will be waiting for the release of oil extraction numbers in the US. In case the estimate shows further reduction, we expect the oil to bounce, which would support the Russian market too. However, the day is likely to start inactively.

    FX market

    Market today. Tuesday, ruble benefited from the “bounce’ at the oil market (price of Brent went even above 44USD per bbl during the day) and by the end workhours the Russian currency has won back all the loss of Monday, trading below 69 RUB vs dollar. In particular, the easing of the monetary-credit policy of Chinese Central Bank has provided positive impact on the markets and ruble. Besides, major tax payments to budget have been conducted on Tuesday, however, no significant demand of ruble has been indicated at the money market: demand at REPO auction with CBR did not exceed a modest limit of the regulator significantly (1.48 trillion RUB vs 1.23 trillion RUB respectively).

    Market tomorrow.
    Despite the today’s break for ruble, we expect that within the nearest future, dollar might still be standing near 70 RUB at the Russian market, waiting for the numbers on reserves and drilling oil in the US (Wednesday evening), which will set the further trend at the commodities market.

    Contributed by Veles Capital
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