Russian stock market evening report by Veles Capital (June 19, 2009, Friday, 4.00 p.m. GMT)
Stocks
Market today. The market is gradually recovering after the emotional sale on Wednesday-Thursday. After that, the oil prices climbed slightly, which increased the attractiveness of the Russian notes. The market was mainly pulled by the oil chips, which climbed following after a serious correction earlier.
Market tomorrow. There are no serious ideas and the market will be managed by commodity markets. If looking at the technical factors, than upping is possible on Monday.
Bonds
Market today. On Friday the market recovered slightly after several days of selling – the quotes of the note within the first echelon added average 10-15 b.p. The activity was indicated in the issues of Moscow and Moscow region, and also VTB-5 and a number of loans of RZD. However, at the background of Minsk forum Cbonds, the activity at the debt market was minimal. All that equally relates to the Eurobond market.
Market tomorrow. On Monday the sale at the market of ruble notes might increase, including at the background of oil price reduction and ruble rate growth. The focus will be on the new issues, which have the premium to the secondary, particularly – X5 loan.
No comment
The retail trade turnover in RF in May reduced by all-time high 5.6%. (Rosstat)
Drop of investments to the principal capital in RF in May accelerated by all-time high 23.1%. (Rosstat)
The number of unemployed in RF in May reduced for the first time in a year by 0.2 mn to 7.5 mn people. (Rosstat)
Extraction of Rosneft in 2009 will grow by 2% to 112.3 mn tons. (Interfax)
Rosneft plans to invest in Yurubcheno-Tohomskoe deposit 25 bn RUR in 2010. (Interfax)
LUKOIL purchases 45% of refinery in Netherlands from Total for 725 mn USD. (Interfax)
Irkutskenergo upped the net profit by IAS in 2008 by 2.4 times to 5.5 bn RUR. (Interfax)
WGC-4 upped the net profit by IAS in 2008 by almost 4 times. (Interfax)
Marshals put up for sale the shares of Vimpelcom, which belonged to Telenor. (Interfax)
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US stock market daily report. (March 12, 2010, Friday)
A court-appointed investigator said in a 2,200 page document that Lehman Brothers failure was due to the company's own senior executives and auditor. Lehman Bothers, who filed for bankruptcy is 2008, used "materially misleading" accounting gimmicks to try to hide the bad investments on the company's books, and to play off the amount of borrowed money. In the report, it is said that Lehman used financial engineering to remove around $50 billion of undesirable assets from its balance sheet at the end of the first and second quarters of 2008, instead of selling those assets at a loss. Coincidently, the company made those moves just months before it filed for bankruptcy; Lehman accountants at Ernst & Young, along with senior executives were all well aware of the money shuffling, according to examiner Mr. Valukas. A major part of the report focused on those accounting maneuvers, known as "Repo 105." included in the report were e-mails from Lehman's global financial controller confirming that "the only purpose or motive for [Repo 105] transactions was reduction in the balance sheet," also stating, "there was no substance to the transactions." Putting aside money shuffling and hiding bad investments, the report was very critical of Lehman's executives, who according to Valukas, "should have done more, done better." However, "the demands for collateral by Lehman's lenders had direct impact on Lehman's liquidity," Valukas also said, "the demands for collateral by Lehman's lenders had direct impact on Lehman's liquidity," "Lehman's available liquidity is central to the question of why Lehman failed." The lenders he mentioned were Citigroup and JPMorgan Chase. Since Lehman Brother's filed for bankruptcy Wall Street crashed, stocks hit 12 year lows and we were faced with the biggest crisis since the Great Depression. Federal Government officials had to pump billions of dollars into the nation's financial system to prevent further damage. Stocks traded in a tight range yet again today, volume was light. Investors were given a better than expected report from the Commerce Department, they reported retail sales rose 0.3% last month. Commodity prices along with the dollar fell; gold fell $1.20 to $1,107.00 and crude oil fell $0.83 to $81.28. Bond prices rose, the yield on the benchmark 10-year note fell to 3.70 from 3.72 Thursday.
World stock markets daily report (March 12, 2010)
It would be stretching things to say that there has been a clear theme in markets overnight. Indeed, for the most part markets are trading broadly where they were this time yesterday. One exception is the bond market, with UK yields under particular upward pressure as investors await the pre-election Budget on 24 March (and the reaction of credit rating agencies to whatever fiscal consolidation is planned). There was little reaction to the US dataflow yesterday. A small decline in initial jobless claims was welcomed but at 462k the level is still a good way north of where we would like it to be in order to be confident that significant sustained growth in non-farm payrolls lied immediately ahead (beyond the clear positive influences that a rebound from February’s poor weather and census-related hiring will have). However, there are some signs that the stock of jobless claims is stabilizing . Meanwhile, the January trade balance reported a narrower than expected deficit, with a small fall in exports trumped by a slightly larger fall in imports. Whilst this was the first decline in exports since April last year, this largely reflected a little payback amongst erratics after a 3.4% mom increase in December.
US stock market opening report (March 12, 2010, Friday)
The triple A rating of the US is at risk, S&P has warned, unless the country adopts a credible medium-term plan to rein in fiscal spending. In a report published yesterday, the ratings agency said that there were risks that “external creditors could reduce their US dollar holdings, especially if they conclude that Eurozone members are adopting stronger macroeconomic policies”. (FT) In other news, Fed’s Yellen is said to be Obama’s choice for Federal Reserve vice chair. Also in the news, White House’s Summers said US recovery has a very long way to go, however US economy is very close to employment growth and deficit must come down after recovery strengthens. (BBG)
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Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang, 8 December 2009
JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
Surgutneftegas: Currency rates are putting away the dividends..., 26 November 2009
We have revised our model of Surgutneftegas. The reason for that was the output of the 3Q 2009 report, correction of our suppositions of the company’s future development, and also the postponing of the target time and evaluation one year forward. Particularly, in our model of Surgutneftegas we have corrected the former forecast of income for the current year towards reduction: on EBIT – by 2.2%, on the net profit – by 21.5%. Mainly that happened due to the corrections on the operating estimates, and also due to the continuing strengthening of Russian ruble, which, considering significant dollar liquidity of the company, turns into negative currency exchange. Due to the negative currency exchange precisely For the second quarter in a row Surgutneftegas shows low level of the net profit. The fourth quarter, as we see it, will not make an exception and we expect negative currency exchange similar to the ones in the third quarter.
Gazprom: Having passed the bottom, 23 November 2009
We have revised our estimation of Gazprom’s shares. The reason for up-dating the company’s model was the report by IAS for 1H 2009, the budget draft for the next year and corrections of WACC method calculation. The provided financial report of the gas monopoly totally brought no surprises. As it has been expected, the second quarter was worse than the first one and likely was the weakest within the whole year. In 1H 2009 the financial estimates were affected by the decline of the gas sale at all markets by 22.3% average, and by the reduction of the retail price of gas by 9.6% in the state of the far abroad and by 24% in Russia. As a result within the six months of the year 2009 sales slipped by 24.1 bn USD or by 32.8% and formed 49.285 bn USD, operating profit and EBITDA showed reduction by 56.7% and 52.6% respectively and formed 12.98 bn USD and 16.18 bn USD.
Cox and Kings IPO review, analysis and recommendation, 18 November 2009
Cox and Kings proposes to make its IPO in the price band of Rs316-330/share, at a face value of Rs10 each, and to issue 1.85cr shares, of which 30.5lakh shares are offered for sale by Lehman Brothers Opportunity, Deutsche Securities Mauritius and Merrill Lynch Capital Markets Espana. Therefore, the fresh issue by the company will be to the extent of 1.55cr shares. The company plans to use the proceeds for debt repayment (Rs129.6cr), acquisitions and other strategic initiatives (Rs150cr), investment in overseas subsidiaries (Rs62.5cr), and investment in corporate offices and upgrading its existing operations (Rs60cr).
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