• Russian stock market daily evening report (September 04, 2015, Friday)


    The foreign background developed negatively for the Russian market. Global exchange indices and commodity prices showed reduction at the back of the increased probability of the rate upping in September and alarms regarding the trade character at the Chinese market early next week after the holidays are over. At the back of the unemployment reduction from 5.3% to 5.1% the alarms appeared that the current level of unemployment is already above the balance, that it requires rate upping. Higher than expected growth of salary per hour is favorable for that. The Russian market moved within the global trends, reduction went on a wide range of notes. Shares of Raspadskaya were the top losers at the back of IAS report; Inter RAO, Polymetal and Aeroflot were looking down. Mechel, Sollers, NMTP and Polyus Gold were above the market.

    Despite the unemployment reduction, the number of jobs outside agriculture formed 173K for August while growth was expected to form 217K. Though the similar level cannot be taken as the estimate of economy’ weakness, nevertheless, a 12-month average currently forms 243K and within the recent months growth has decelerated significantly. Note, that unemployment reduction occurred at the back of another drop of the participation rate to the lowest from 1977. Under such conditions, the unemployment rate can unlikely be takes as an adequate estimate of the labor market status. We assume that that given makes the rate upping prospect uncertain and correction might occur next week. Monday trade in China will be important after a two-day holiday as the investors are alarmed that the authorities suspend interventions at the exchange market, leading to the resuming crash of the exchange market of Shanghai.


    Activity at the debt market was low on the threshold of the employment numbers’ release in the US. At the given background, the quotes of the domestic loans consolidated at the formed level. The OFZ curve remained with no significant changes. In the corporate segment, unaggressive buying went in the issues: Evraz-8, Systema-3, and VTB MB-43. Eurobonds did not change seriously either. Russia-43 lost 30 bps down to 94% of the nominal, Russia-23 – 10 bps to 96.45% of the nominal.

    Monday morning, the participants will be following the open of the Chines markets after the four days off. At that, the US will not be trading due to celebration of the Labor Day, therefore, the end of trade might go sideways.

    FX market

    Within the morning hours dollar tried to exceed the level of 68 RUB, benefiting from another reduction of the oil prices below 50 USD per bbl. However, the cost of the oil returned to the former level above 50 USD, and attempts of the American currency did not succeed.

    The session of the Bank of Russia will be the key event of an upcoming week as on the threshold of the session the regulator will probably continue keeping the banks “on short rations” on ruble liquidity. At that, despite the results of the domestic CBR session, the domestic currency might react, but for a short-term.

    Contributed by Veles Capital
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