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Reports Russia

Russian stock market daily morning report (February 12, 2014, Wednesday)

February 12, 2014, Wednesday, 10:25 GMT | 05:25 EST | 14:55 IST | 17:25 SGT
Contributed by Veles Capital

Yesterday’s statement by Yellen did not make any surprises – Fed promised to continue cutting QE by moderate rates, labor market was far from recovery. The statement that the base interest rate is to remain low even after unemployment reduced below 6.5% might be called positive. Since morning the news that the chamber of representatives of the Congress approved upping the volume of the state debt ceiling, which allows the authorities to continue borrowing above the current level of 17.2 trillion USD, was the strongest driver this morning. The state debt ceiling will be upped until March 15, 2015.
Main events
Metro Group retailer posted weak results of activity for 4Q 2013.
Sales of the company for 4Q 2013 underperformed 3.3% to 18.7 bn EUR. EBIT numbers lost 15.7% from 1.27 to 1.07 bn EUR. Selling by peer stores remained at the previous year’s levels. We suppose the given news might make a negative impact on the activity of the investors at the upcoming IPO, which is scheduled for 1H 2014.
South Stream to Italy disclosed new risks – the Austrian option is being discussed again.
There is an extreme risk of failure to meet the schedule time constraints of launching the Italian part of the gas pipeline and the entire South Flow system.