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Reports Russia

Russian stock market daily morning report (July 29, 2014, Tuesday)

July 29, 2014, Tuesday, 09:37 GMT | 04:37 EST | 13:07 IST | 15:37 SGT
Contributed by Veles Capital

The usual “bet on Russia”, common and preferred stocks of Sberbank, are showing anticipating reduction of quotes. Normally, in times the investors and traders intend to bet on situation improvement in Russia, they buy Sberbank. Unfortunately, we currently observe the opposite process. Progressing reduction of Sberbank might indicate fundamentally negative re-estimation of the Russia’s economy prospects.

We suppose the negative sentiment will dominate the market until the end of the week.

Main events

RAS net profit of Gazprom Neft for 1H 2014 grew 34.3%.

We assume the results are mildly positive – rise of the financial estimates is initially the consequence of ruble getting cheaper. Under the current market terms, the report will unlikely be a reason of quotes growth of Gazprom Neft.

Output of steel decelerated in China.

Association of metal workers of China – CISA – has posted production stats for July. According to the association, in mid July large and middle-sized Chinese metal works, included in CISA, have been smelting 1.8077 mn tons of steel per day. Reduction of the volumes vs the first decade of the month formed 0.37%.

Inter RAO posted operation results for 1H 2014.

Generation of the group reduced 4.9% (hereinafter – yoy) to 68.72 bn KW per hour, and the Russian generation – by 5.2% to 61.77 bn KW per hour. Sum volume of power energy export has reduced 34.6%. Sum import for 1H 2014 has reduced 27.8% mainly at the expense of the reduction of deliveries to Kazakhstan (-26.2%). We suppose that the negative results of the group is generally provided by the reduction of the domestic consumption of power energy and growth of power output by HEPS (+5.5%) and NPP (+3.5%)