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Reports Russia

Russian stock market daily evening report (September 01, 2014, Monday)

September 1, 2014, Monday, 17:26 GMT | 12:26 EST | 21:56 IST | 00:26 SGT
Contributed by Veles Capital


Stocks

Market today. The Russian exchange market showed mixed dynamics at Monday daytime. Oratory of the vice-president of the State Council of China on Chinese party speaking against any type of sanctions against Russia, and attempts to hold back development growth in Russia served as a reason of growth. Moreover, he announced further development and expansion of cooperation with Russia. Extra positive news background had been formed in Minsk, where the meeting of the contact group on Ukraine, involving representatives of DPR, Russia and Ukraine. Despite the fact that the given meeting is just the first round of such negotiations, the very fact of the meeting indicated interest in the peaceful solving of the conflict. The results of the given meeting might give grounds to start of de-escalation of the conflict at the east of Ukraine.

Nevertheless, it has been announced in the afternoon that the army of Ukraine has used prohibited dispenser munitions in its artillery attack of the airport in Lugansk. Attack of Lugansk has not been suspended, the situation is critical in the city, announced at the website of the local authority. In its turn, the European Council expressed being ready to take further steps in the light of the development of the negative situation in Ukraine. Extra negative was added by the news on the sector sanctions against Russia being introduced by Australia meaning suspension of export of equipment for oil-and-gas industry and suspension for the Russian state banks from entering the Australian market of capital. At the given background, the domestic market slipped down from 1,419 to 1,390 points at MICEX.

European indices showed mildly negative dynamics today. The statements by the chancellor of Germany that the new sanctions against Russia possibly making impact on the economy of Germany, however, introduction of given measures had been justified. Note that last week the head of ECB and the head of the Ministry of Finance of Germany had already announced the exhaustion of measures, taken by ECB in order to recover the economy of EZ. Therefore, the statements on any type of any negative consequences for the European economy would be taken by the market participants in minor tune.

Market tomorrow. We assume that the Russian stock market’s dynamics at the trade open would totally depend on the results of Customs Union, Ukraine and EU representatives’ meeting.


Bonds

Market today. The debt market started the week with reduction feeling the threat of new sanctions on behalf. Yield of BFL grew for the day by 2-5 bps. In the corporate segment, selling went on the loans Norilsk Nickel MB-2, UniCreditBank-5, and FNC-22. Eurobonds lost 40-70 bps average. Russia-43 went 35 bps down to 99.8% of the nominal, Russia-23 – by 35 bps to 97.95% of the nominal.

Market tomorrow. Monday did not introduce any new negative surprises for the Russian market, therefore, domestic loans’ sell-off might end.