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Reports Russia

Russian stock market daily evening report (March 26, 2014, Wednesday)

March 26, 2014, Wednesday, 16:21 GMT | 12:21 EST | 20:51 IST | 23:21 SGT
Contributed by Veles Capital


Stocks

Market today. The Russian shares continued climbing today under pressure of the results of tuesday trade. The negative effect of forecast downgrade on ratings turned out to be of a short-term nature. The summit of G7 started this week, and the main subject of the Agenda was the possibility of new restrictions against Russia. Possibly we hear some new negative statements within the nearest days to be related to the solving of the Crimea issues. However, it currently gets clear that the matter of restrictions is less up-to-date and no longer in focus. Given leads to reduction of state risk, related to investing into the Russian economy. Resulting from that we see recovery of ruble rate and growth of quotes on the majority of the liquid stocks at Moscow market.

The main growth of quotes of the Russian shares was indicated after the trade open at Moscow market. Than at 12:00 pm MSK, after the trade opened in Europe, the activity of trade will fade, which leaded to change of an intraday dynamics of the index for the negative. We relate that to the fact that this year, after the Russian traders built up the volume of operations at the foreign markets. Mainly that involves the participants that are busy with intraday trade.

Today the Russian market was leaded by the stock of Novatek, Raspadskaya. Investors are returning into the shares of Novatek as it got clear that the restrictions of the US would not involve Russia's second largest gas producer.

The notes of Raspadskaya are adding in price after having posted weak annual results by IAS and despite the decision of the BoD not to payoff dividends for 2013 FY. We are likely to observe correction downwards in the stock of Raspadskaya.

The notes of Aeroflot are climbing at the back of data on high growth rates of the passengers load in the company. Aeroflot became the second largest company in Europe by given estimate.

Market tomorrow. The positive foreign macroeconomic background stimulates bulls in Russia. This week we saw growth of the consumers' confidence index, preservation of the high PMI manufacturing of EZ and increased expectations of the new economic stimulation in China. All these factors are quite important and positive for export-directed Russian economy and we might say that their effect will dominate this week. Looks like only new negative from Ukraine might threat with new shares selling.

We assume that improvement of the economic expectations affects the attitude toward the metal names: demand of steel products is directly related to the rates of economic growth. Likely the given factor and expectations of the financial results for 2013 FY stimulates interest in the shares of the steel smelters.


Bonds

Market today. Wednesday was calm in terms of news and the Russian debt market continued winning back the loss of the first half of the month at the back of the stabilization of the situation in Ukraine. The BFL reduced by another 10-15 bps. In the corporate segment, buying went on the loans MTS-7, Metalloinvest-6, and Vimpelcom-1. Eurobonds added about 50-150 bps  despite the UST curve growth. Russia-43 grew 135 bps to 96.9% of the nominal, Russia-23 - by 120 bps to 97.6% of the nominal.

Market tomorrow. Thursday we expect preservation of positive dynamics at the Russian market. At that, by the end of the day the final estimation of GDP and labor market data, which might effect the Russian market too.