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Reports Russia

Russian stock market daily morning report (August 06, 2014, Wednesday)

August 6, 2014, Wednesday, 08:54 GMT | 03:54 EST | 12:24 IST | 14:54 SGT
Contributed by Veles Capital

ISM non Manufacturing Composite and industrial orders’ numbers posted in the evening (both above targets) had just made the selloff at global grounds worse – good data on the American economy indicated increased probability of the soon tightening of the monetary policy of Fed. Yesterday’s drop of the American market and the negative dynamics of the Asian markets this morning will give grounds for the progress of the negative dynamics at the Russian market. At daytime, the market dynamics might be affected by the industrial orders’ data in Germany and industrial production in the UK.

Main events

The volume of light vehicles in Russia might shrink 8 to 12% yoy.

PricewaterhouseCoopers expects that output of the light vehicles for 2014 drops 3% yoy, and the sum demand of vehicles reduces 8-12% yoy. According to our estimation, the main reason of given process is actual deceleration of the growth rates of real available income at the back of continuing reduction of export income from selling non-energy goods from 2012. Drop of income turns into high inflation, preserving in Russia (7-8% per year), while the nominal income does not increase. Respectively, the buying capability reduces. The strongest effect indicates in the least wealthy groups of citizens, which did reflect on the demand for low cost vehicles. In addition, we should indicate quite a new effect – reduction of the number of free parking in large cities.

Rosneft and NNK attempted to buy Bashneft.

According to Vedomosti, Rosneft and Independent Oil Company (NNK) made an offer to the owners of Bashneft to buy the oil company even prior to the moment SPO of company had been announced. Considering the experience of acquisition of TNK-BP, interest of Rosneft in buying Bashneft might become an additional reason for selloff in the stock of the company.