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Russian stock market daily morning report (October 16, 2012, Tuesday)

Contributed by Veles Capital

The key event in Europe this week will be the summit of European leaders in Brussels, which is expected to give clear measures relating the Spain and Greek matters. Even the positive surprises in ZEW indices on the Eurozone (against the background of the earlier output positive indices of purchasing managers in the industry) will unlikely become a long-term driver. We expect mild growth of quotes by the results of today.

Main events

Gazprom neft output financial results of 9 months 2012 by RAS.

Profit of Gazprom Neft grew 18% within 9 months of 2012.

MEDT is for changing the principles of gas price forming.

No equal-income prices of gas are to be in the RF by 2015.

Volume and targets of applying the collected dividends of Rosneftegas will be defined in 2013.

We expect the final cancellation of the matter of Rosneftegas entering the Capital of the power energy company suspended pressure on quotes.

Price of additional emission of IRNC Holding might form 2.16 RUR.

IRNC Holding plans an additional placement of approximately another 34% of the current capital. Placement price will be set in the volume 2.16 RUR per share.

Price of capacity of ZSP “Volga” resulting from the repeated KOM reduced 23.4%.

Reduction of prices of ZSP Volga will make a negative effect of the finance of TGK-7. Among the generation companies we assume investors better pay attention to RusHydro and E.ON Russia.

Sberbank opened a credit line for 24 bn RUR for a subsidiary of Mechel.

That confirms our idea that the Russian authorities will not tolerate bankruptcy of strategic enterprises of RF. However, under current conditions, receiving a new loan threats the company with violation of covenants, which might block the opportunity of attracting credits for business expansion.

FosAgro plans additional emission.

Threat of dilution of minority interest will pressure the quotes of the company’s share in the nearest prospect.