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Reports Russia

Russian stock market daily morning report (July 30, 2014, Wednesday)

July 30, 2014, Wednesday, 09:13 GMT | 05:13 EST | 13:43 IST | 16:13 SGT
Contributed by Veles Capital

We assume that today the trade session will open in the red zone at the Russian market at the back of the EU Council having announced a new round of the limiting sanctions against Russia. Sanctions should involve the oil industry, defense industry, dual-use goods, and the Russian banks, which from now on have quite limited opportunities at the European market. According to the plan of the EU, the sanctions are introduced for 3 months. As the three months term ends, the government of the EU will get back to considering the given issue.

Main events

Market council kept the time constraints of PDC and CCO unchanged.

Yesterday, the council of market has not negotiated the extension of the time frame of investments repayment on the power delivery contracts (PDC) from 10 to 15 years. At that, the variant of a multiple-year (four-year) competitive capacity outtake (CCO) has not been worked out. Given means that the companies are unable to input the long-term monetary flows in their investment programs and that, in its turn, raises the risks of uncertainty.

Severstal made a decision of dividends for 2H 2014.

Dividends of Severstal for 1H 2014 might form 2.14 RUR per share. In case the company preserves the current level of payments for 2H 2014, the dividend yield forms 2.9%.

NOVATEK will post its IAS report for 2Q 2014 today.

We expect more than 2x growth of the net profit of NOVATEK for 2Q 2014 vs the similar period of the previous year – to 27.7 bn RUR. Growth of the financial estimates will be provided by the purchase of a share in Severenergy, launch of the gas condensate processing facility in UST-Luga and the positive currency exchange resulting from ruble strengthening.