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Reports Russia

Russian stock market daily morning report (August 15, 2014, Friday)

August 15, 2014, Friday, 10:43 GMT | 05:43 EST | 15:13 IST | 17:43 SGT
Contributed by Veles Capital

Problem in the relations of Russia and Ukraine with its western partners is the key factor for the Russian stock market. Easing of the tension on the sanctions matters and quite an easy response of Russia to given measures in the form of limiting import of foodstuffs has improved the sentiment of the investors. Given fact leaded to growth of RTS and MICEX indices, which lasted for five sessions straight. However, the developing scandal on Russian military vehicles having crossed the Ukrainian border Thursday night might spoil the mood of the investors, which would inevitably lead to start of a selloff at Moscow market. We expect the Russian stocks’ quotes to reduce.

Main events
World Gold Council posted stats of gold consumption worldwide.

Demand of gold worldwide reduced in natural terms for 2Q 2014 by 16% yoy to 963.8 tons. In monetary terms, consumption has reduced 24% yoy to 39.92 bn USD. We assume that in the nearest future the offer of gold would be upping on behalf of the gold miners, while investors continue cutting their positions by selling gold bars and ETF certificates. We assume that s significant change of relations toward gold occurs after suspension of the Russia-Ukraine crisis as the investors would start referring to the high-yield instruments (stocks) and require less hedging of the inflation and political risks.

PhosAgro and Czech Chemoprojeñt Nitrogen will build production of carbamide for 7.8 bn RUR.

Capacity of the new production of carbamide forms 500 K tons per year, which allows building up production of the given types of products by 50% and becoming the largest Russian enterprise on production of carbamide.