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Reports Russia

Russian stock market daily morning report (July 28, 2014, Monday)

July 28, 2014, Monday, 09:49 GMT | 04:49 EST | 13:19 IST | 15:49 SGT
Contributed by Veles Capital

Risk of further expansion of the sanctions does preserve and the situation is up tight. We assume that the trend towards reduction of the Russian indices does not change this week. The big news of Monday is announcement of the decision arbitration court in Hague on Yukos case. The word is that the Dutch court admitted that Russia has violated the Energy Charter in Yukos case and has actually admitted expropriation of the oil company, having evaluated the loss at 50 bn USD. Decisions on expanding sanction might be made by EU. At the back of the possible expansion of sanctions, foreign capital outflow from the exchange market might grow – same as announced earlier, the matter of assets exiting Russia is discussed by the sovereign investment fund of Norway (its investments into Russia form about 7.6 bn USD). The coming week will be filled with important macroeconomic stats – data on the new jobs in US, PMI in manufacturing in China, and as usual, the investors will be focused on the Fed session, scheduled July 29-30.

Main events

IAS net profit of Rosneft for 2Q 2014 formed 172 bn RUR.

The company’s results appeared to fir the targets – the net profit was projected at 168 bn RUR. We assume that the financial results of the company for 2Q 2014 are neutral, nevertheless, the stock of Rosneft will be experiencing pressure for the nearest year under the circumstances of applied sanctions, risk of their expansion, decision of the court on UKOS case.

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