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Reports Russia

Russian stock market daily morning report (May 28, 2014, Wednesday)

May 28, 2014, Wednesday, 08:37 GMT | 03:37 EST | 12:07 IST | 14:37 SGT
Contributed by Veles Capital

We assume that the uncertain situation in Ukraine and decision on the “gas matters” still form the key factors at the market on Wednesday. Sum news background forms suppositions for progress of the downward correction. We believe that tomorrow the Russian market does not show any single trend at the open and is likely to stay in the red zone. Overnight the exchange indices in the US showed growth. Futures for the American indices are trading positively. Oil and precious metals are experiencing pressure. ATP exchange indices are climbing Wednesday due to data on the durable goods orders and consumers’ confidence in the US. The volume of durable goods orders in the US for April has unexpectedly grown 0.8% vs the previous month, while the 0.7% reduction was expected. Index of real estate cost in 20 largest cities of the US, calculated by S&P/Case-Shiller, grew for March 12.4% yoy, after growth by 12.9% for February. Upping by 11.8% was expected. Along with that, the consumer confidence index grew in the US for May to 83 points, announced the research organization Conference board. The estimate was in line with the market’s expectations. Along with that, the value of the indicator for the previous month has been revised from 82.3 points to 81.7 points.

Main events

NOVATEK prolonged the buyback program to June 7, 2015.

As of June 27, 2014, 14.19 mn company’s shares (including GDR) have been bought back within the frames of the program. About ¼ of the assets to be directed to carrying on with the program has been spent already and will be supporting the quotes of NOVATEK.

Ministry of energy offered to adjust the tariffs for heating according to index by “inflation+”.

Given offer might be considered in the light of gradual switch to the offered method of adjusting tariffs called “alternative boiler”. Despite the fact that the change to the supposed plan “inflation plus” would be remarkably preferred to the industry, the earlier the offered adjustment by “inflation minus”, the given mechanism would be another step of departure from the long-term regulation in the heat energy.