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Reports Russia

Russian stock market daily morning report (June 20, 2014, Friday)

June 20, 2014, Friday, 11:14 GMT | 06:14 EST | 14:44 IST | 17:14 SGT
Contributed by Veles Capital

Peter Poroshenko having announced his peace-making plan on the situation at the East of Ukraine, which provides for significant compromises to militias, might mean the coming end of crisis. Currently, when the representatives of G7 threat with expansion of sanctions to the economy of Russia, any signs of tension easing in Ukraine lead to growth of the Russian stocks’ quotes. However, rise of military activity of the Ukrainian army near Slavyansk and the relocation of the Russian army to the zones bordering with Ukraine threats with a significant rise of tension. Such events are quite negative for the Russian exchange market. Hostile statements of the representatives of the EU and US might enforce the negative.

Main events

Uralkaliy corrected its strategy

For 1Q 2014 the company’s sales grew 17% to 862 mn USD, while the production volume grew 38% to 2.9 mn tons, volume of selling – 63% to 3.1 mn tons. Average export price reduced 31% to 215 USD per ton. Output const of one ton of potassium reduced from 60 to 49 USD per ton.

Export to China might reduce 5.4% for the current year

We assume that the drop of export to China by 5.4% will not be taken negatively on behalf of the investors in the stocks outlook. Drop of sales will not exceed 0.31 bn RUR, which forms less than 0.05% of the sales we targeted.