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Reports Russia

Russian stock market daily evening report (July 17, 2014, Thursday)

July 17, 2014, Thursday, 18:57 GMT | 13:57 EST | 22:27 IST | 00:57 SGT
Contributed by Veles Capital


Stocks

Market today. The Russian stock market was down today under the pressure of new sanctions, which the U.S. government entered against Rosneft, Novatek, Vnesheconombank and Gazprombank. New sanctions deprived of the possibility to receive U.S. loans more than 90 days, but does not prohibit American partners to support them with the other business relationships and carry out financial transactions. Under the pressure of the sanctions were also concerns defense Almaz-Antey and Kalashnikov. In addition, investors have caused a backlash and Dmitry Medvedev's statement that the new wave of sanctions would contribute to the growth of anti-American and anti-European sentiment. By the end of the day, the MICEX index fell by 2.8% - to 1433.75 points. In the fall of leaders were companies came under new sanctions. By Rosneft (-4.6%) and Novatek (-8.6%) showed a significant reduction of the background limited access to financing from U.S. financial institutions. Also today, shares fall M.Video (-6%) due to weak operating results for 2K14. Revenue in 2K14 showed no growth in absolute terms amounted to 34.7 billion rubles. against 34.68 billion rubles. g / g On the background of zero revenue growth comparable store sales (LfL) fell by 5.6%. We appreciate moderately negative results retailer and waiting for the publication of financial results for the 1P14 (emphasis on EBITDA and forecast PE and dividend). In our opinion, the dividend yield M. Video (at 7.4%), which is significantly higher than in the whole of the Russian public sector retail remains an attractive factor for long-term investment. Against the market today grew DDR Rusal (+1.7%) on news of debt restructuring. At the same time, Dixy Group (0.24%) demonstrated strong performance today. Revenue for the retailer 1P14 increased by 22.4% y / y, up to 107 billion rubles. We expect strong financial results in August. We believe that the growth of quotations retailer will continue and we believe that the company attractive for medium / long-term investment.

Market tomorrow. We believe that on Friday, the downward trend will continue in the market and we believe that the correction of the world against the backdrop of geopolitical areas of disagreement will remove "overbought" on the domestic stock market


Bonds

Market today. Expansion of sanctions against Russia collapses quotes loans. In ruble main segment sales fell to sovereign segment, falling incomes up to 2 percentage points Yield loans while soared by 15-30 bps In the corporate segment, sales were less aggressive, a decline of 30-60 bp In the fall of Eurobonds reached 7 pp The most active sales fell on loans fell under sanctions VEB and GPB. Russia-43 lost 4 percentage points, dropping to 101.5% of par, Russia-23 - 2.2 percentage points to 100.8% of par.

Market tomorrow. Factor sanctions continue to put pressure on the market, although articulated action, in our opinion, will have limited impact on the Russian economy. Pressure will also have global reassessment of risk appetite and yield weak data on the U.S. housing market.