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Reports Russia

Russian stock market daily morning report (July 01, 2014, Tuesday)

July 1, 2014, Tuesday, 09:32 GMT | 04:32 EST | 13:02 IST | 15:32 SGT
Contributed by Veles Capital


Monday, the ceasefire term between Kiev and DPR has ended same as the ultimatum of the US and EU against Russia demanding action in the favor of official Kiev has expired yesterday. From the news outlook, no activity indicated on behalf of Russia. Investors are forced to guess whether the sanctions against Russia are to be bad or easy. We suppose that sanctions will not be direct – like prohibitions of import of Russian products. Likely the restrictions involve delivery of some technologies or equipment to Russia, which might make some effect in the future. Given means that the effect of given sanctions is currently mild and does not lead to widely spread selloff at Moscow exchange. However, start of military action against DNR inevitably leads to dip of the Russian indices.

We assume that new sanctions might be announced in the afternoon today.


Main events

Akron and Rio Tinto established a joint venture in order to bring to life the potassium project Albany in Canadian province Saskatchewan.

The first BoD meeting of the new JV took place in London. The JV has been recently established by the Canadian subsidiaries of Akron and Rio Tinto in order to proceed with evaluating the potential of the potassium areas in Saskatchewan. The supposed resources of the area form 1.4 bn tons with an average percentage of potassium chloride forming 31%, sum volume of the extractable resources of potassium chloride forms 329 mn tons.

KES’ assets consolidation is on the home straight.

Stockholders of generation assets of KES Holding voted for consolidation based on Volzhskaya TGK via conversion. Shares will be bought back from those holders that disagree with reorganization. Buyback prices are as close as possible to the current market quotes, therefore, we do not expect any significant change of stock prices.