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Reports Russia

Russian stock market daily morning report (January 14, 2014, Tuesday)

January 14, 2014, Tuesday, 12:55 GMT | 07:55 EST | 18:25 IST | 20:55 SGT
Contributed by Veles Capital


Positive flow of corporate news and industrial news set the mood at Moscow exchange yesterday. However, close of US trade in the red zone yesterday (S&P 500 lost 1.26%) and drop of the quotes at Asian markets do not leave any hope for progress of growth at the Russian market.
 
 
Main events
 
Ministry of energy cut the minimal cost of retail selling by half
 
Ministry of Energy cut the minimal cost of debt of Buryatenergosbit by half. Now the company will have to pay just 10% of its debts’ cost. Lack of buyers intending to buy the given energy distributing asset highlights unattractiveness of the given segment of business as the energy distributing companies are often turning into debtors due to high rate of non payments for energy.
 
LUKOIL built up oil extraction for 2013 by 1% to 90.8 mn tons
 
In 2013 company managed to break the many years-long negative trends on reduction of daily average oil extraction. We expect further growth of extraction in 2014. In addition, launch of West Kurna allows the company building up the free cash flow significantly, which in its turn allows LUKOIL building up dividend payments.
 
Program of beneficiary auto crediting might be prolonged
 
We are skeptical about the given program in the given situation: in 2013 the Russian automobile producers announced reduction of selling automobiles despite the fact that beneficiary auto credit program was operating for the 2H 2013.