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Reports Russia

Russian stock market daily evening report (January 17, 2014, Friday)

January 17, 2014, Friday, 17:08 GMT | 12:08 EST | 22:38 IST | 01:08 SGT
Contributed by Veles Capital

Market today. Shares of Rosneft gained leadership in growth after messages on 13% adding of gas extraction by the company above the earlier announced plan. Quotes of AvtoVAZ showed confident growth after Boo Anderson was assigned new president of the company as he was well experienced and respected in the automobile production industry. Shares of Raspadskaya grew after data on the production of met coal for 2013 was posted (12% growth yoy). Inter RAO added after Rosneftegas bought a share of Inter RAO from Russian Property. Buying was conducted with a 31% premium vs today’s open price of the market. Shares of Uralkaliy were adding at the back of the high volume of deals with the notes of the company. Significant rise of interest toward the company was related to expected increase prices for potassium chloride for consumers in Brazil by 9-12% and signing contracts for shipping fertilizers to China. Polymetal – one of Russia’s largest producers of precious metals – is adding for the recent days despite the negative expectations at gold market, related to investors transferring their assets from low-profit instruments like ETF-funds into the shares of American companies. We assume that is explained by the quotes of Polymetal reaching the quotes of Polyus Gold, which were much more positive for 2013.
Market tomorrow. We assume growth in the stock of Raspadskaya was unjustified as selling price of met coals reduced from 2Q 2013. At the meantime the selling price of coke (made from met coal) for 4Q 2013 was 25% below the previous year’s prices – given indicates that financial results of Raspadskaya got worse for the year. Likely we see correction in its stock within the nearest days. High buying price of Inter RAO’s stock by Rosneftegas indicates significant underestimation of the shares of Inter RAO and we expect company’s capitalization to build up next week.
Market today. Continuing weakening of ruble and high rates at IBC market leaded to another inactive day at the domestic debt market. Quotes of the loans moved within the frames of the sideways trend. The most active trade went on the issues Norilsk Nickel MB-2, UralSib-5, Bashneft-1. Eurobonds were flat despite reduction of the UST curve overnight. Russia-42 added 20 bps to 101.75% of the nominal, Russia-22 – 10 bps to 102.66% of the nominal.
Market tomorrow. Monday the holiday in US will become a hold-back factor, therefore, we expect low trade activity. At that before the trade open at the Russian market, a number of serious stats is coming out in China and it might affect the participants sentiment.