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Reports Russia

Russian stock market daily morning report (July 02, 2014, Wednesday)

July 2, 2014, Wednesday, 09:16 GMT | 04:16 EST | 13:46 IST | 16:16 SGT
Contributed by Veles Capital


We expect Russian market to open Wednesday close to the previous close levels, mainly in the green zone and during the day the market might bounce to 1485-1490 points at MICEX. Geopolitical issue still is the major risk of the day. In case the problem does not get solved in Ukraine in the nearest future, USA will go for introduction of new sanctions that the state has prepared already. We expect low volume of macroeconomic numbers. Orders by processing industry for May will be announced at 6:00 pm MSK. Weekly data on the oil reserves dynamics by EIA is coming up at 6:30 pm MSK. Janet Yellen is to speak in Congress today.


Main events

The companies of Gazprom energy holding cut sum output of power energy for 1H 2014 by 7.4%.

According to the system operator, reduction of output continued in April and May, which reflects the current recession in the industry and as follows  - the drop of demand for power energy. In case the given trend preserves in 3Q 2014, we will be forced to downgrade our projections on the drop of demand of power energy for 2014 (-1% yoy).

Rusal is close to an agreement on refinancing 4.75 bn USD credit.

The only bank that has not agreed is RBS, which gave 56.8 mn USD out of the syndicated credit. Considering 75% of creditors having agreed to the new terms on credit (delay of the due date from 2016 to 2018 and a two-year grace period getting included in the deal), Rusal has addressed the court. The hearings will start July 10 in High Court of London and July 15 in the Royal Court of Jersey Island.

BoD of Inter RAO has adopted a new dividend policy.

Given change might be related to the offer by the state to the state companies to direct 25% of the consolidated net profit annually to dividends. However, given recommendation does not mean definite payoffs to stockholders, as the company earned loss for the year at the expense of non-recurring non monetary issues, same as it did in 2013.

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