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Reports Russia

Russian stock market daily morning report (June 02, 2014, Monday)

June 2, 2014, Monday, 11:43 GMT | 06:43 EST | 15:13 IST | 17:43 SGT
Contributed by Veles Capital

Friday the Russian shares were losing in price following the reduction of European indices, futures for the American stock indices and Brent oil. By the trade close at Moscow market, consumers’ confidence index (81.9 points) was posted in the US, which turned out to underperform targets (82.5 points) and April value (84.1 points). However, trade at NYSE closed in the green zone – S&P 500 grew 0.18%. The Russian shares will likely be winning back given growth today. Partial payment of the debt for gas by Naftogaz decreased the tension in Russian-Ukrainian relations – possibly that becomes a key positive factor for the trade at Moscow exchange market early this week.

Some signs indicate that the investors might rise their interest in the Russian shares for the coming few weeks. Rise of expectations of application of the economic growth stimulation instruments in China might be mentioned among the key factors. The other factor is the research by Ernst&Young on investment appeal of the states that disclosed that Russia occupied the third place for 2013 by inflow of direct foreign investments after the US and China. Actually after the crisis in Ukraine is solved and no longer affects the Russian economy and policy, we might be expecting return of the foreign investments inflow.

Main events

Dvorkovich stated that the government will not interfere in the negotiations between banks and Mechel

We assume that given statement signals the major holders of the company’s debt (Russian state banks) to start fighting for control over Mechel. For the stock holders given oratory might threat with mandatory buyout of stock.

Bashneft posted IAS report for 1Q 2014

We expect rise of the net profit by 15% vs the 1Q 2013 to 13.8 bn RUR Positive dynamics is related to growth of extraction and weakening of ruble rate.