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Reports Russia

Russian stock market daily morning report (July 31, 2014, Thursday)

July 31, 2014, Thursday, 08:53 GMT | 03:53 EST | 13:23 IST | 15:53 SGT
Contributed by Veles Capital


We assume that the Russian market will be waiting for the final variant of the sanctions. In case Sberbank is not included in the list, than the market will likely be happy to welcome given news. In the opposite case, the market might slip significantly in the moment.


Main events

IAS net profit of NOVATEK for 2Q grew 175% vs 2Q 2013.

We estimate the financial results of the company as positive, quarter net profit has exceeded the market’s consensus by 15%. The decision of Total related to sanctions to suspend buying shares of NOVATEK might be a serious obstacle to the company’s quotes growth – earlier the company planned to build up its share in NOVATEK to 19.4%, as of the end of June, the share of Total formed 18% of NOVATEK.

Polymetal: operation results.

Polymetal Int. upped gold production for 1H 2014 by 24% yoy to 386 K ounces. Sum output in gold equivalent grew 17% to 652 K ounces. Despite the significant growth of production, sales reduced 2% yoy to 724 mn USD. Reduction of sales at the back of the production volumes raise indicates significant reduction of profitability: price of selling precious metals showed reduction, while the operation costs have been upping correlating to the production volumes.

Enel OGK-5 provided strong consolidated results for 1H 2014.

The company provided results that have significantly outperformed our expectations. At that, the company managed to not cut the useful output of power energy much when demand within the state has reduced and significant reduction of the share of generation of power energy by thermal stations. Given growth of the net profit might be a positive signal at the back of the fact that the company has adopted its dividend policy last year, according to which annual amount directed to dividends forms 40% of the net profit.

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