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Reports Russia

Russian stock market daily morning report (February 20, 2014, Thursday)

February 20, 2014, Thursday, 08:01 GMT | 03:01 EST | 12:31 IST | 15:01 SGT
Contributed by Veles Capital

The western grounds closed looking down yesterday, reacting to the weak stats on the new construction in the US. Volumes of construction in the US showed reduction of volumes by 16%. Given data might indicate that reduction of the scale of financing within the frames of QE3 has started affecting the real estate sector negatively. Note that the dynamics of the real estate market is one of the key economic indicators for the American investors. Given means that for the next few days we probably observe wide correction at the market.

Main events

Production of light vehicles in RF for January 2014 reduced 14% and heavy trucks – by 59% yoy

Reduction of output followed the reduction of selling light and light commercial vehicles (LCV) in RF for 2013 FY by 5.5% yoy to 2.78 mn units. We assume that such a significant dip of output becomes a serious ground for returning funding automobile credits in Russia.

By the end of the year the net profit of LUKOIL reduced 28.8%

We assume the financial results of the company for 4Q are lightly negative. At that, from fundamental viewpoint, the company still is underestimated and a number of potential drivers are available, that might lead to growth of the quotes of the company’s shares within the next year.