Russia's RTS Index futures - liquid tradable instrument.

This is a discussion on Russia's RTS Index futures - liquid tradable instrument. within the Indices forums, part of the Markets category; Good morning! Bid talks continue to come in thick and fast – world oil companies have been rumoured to line ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Sep 7, 2010, 8:04am   #64
 
china white's Avatar
Joined Jan 2003
Morning Comment - 07.09.2010

china white started this thread Good morning! Bid talks continue to come in thick and fast – world oil companies have been rumoured to line up for British Gas, now – it looks like – Singapore Telecoms, AT&T or – and I love this bit – “one of its rivals” are on the prowl for C&W Worldwide. We commented on this before – companies have loads of cash, which – instead of spending on hiring and growing – they spend on buying targets at hefty premium.

This is a mega-dichotomy and a mega-problem of current markets. Good micro, crap micro. The only real reason why I do not believe in the ghost of “recession’s 2nd dip” is that we are – STILL – deep in the recession macro-wise. But micro runs ahead of macro when it is strong, and I doubt very much that we have topped out –YET – in this leg up.


CORPORATE NEWS:

1. Severstal (SVST LI) posted strong IFRS financials in 2Q10. POSITIVE. Severstal remains our top-pick – see Bloomberg link {NSN L8BWEN3PWT1C <GO>}, also attached. We consider the company’s 2Q10 financial statement as positive and confirm our BUY recommendation on the stock with a target price of $15.5/share. However, 2H10 is likely to be weaker as compared to 1H10 due to lower steel prices and fragile demand on rolled steel products. Nevertheless, its gold mining segment, which is gaining momentum, and high vertical integration into the production of coking coal and iron ore to some extent offset negative market developments. As for North America assets, in our view, temporary improvement may help the company to sell them. Key numbers here are:

· 2Q10 net income in line with our expectations. The company’s revenue increased by 35% q-o-q to $4,245 mn, EBITDA doubled q-o-q to $955 mn. 2Q10 net income was $192 mn vs. $785 mn of net loss in 1Q10.

· Solid results in Russia. Steel division’s EBITDA climbed by 31% q-o-q to $528 mn. EBITDA margin climbed 2 ppt to 22%. Severstal Recourse’s EBITDA jumped by 2.3 times q-o-q to $420 mn, and EBITDA margin added 18 ppt to 48%.

· Gold mining segment: growth continues, on track to transparency increase. EBITDA surged 33% q-o-q to $89 mn and EBITDA margin rose 4 ppt to 54%.

· Severstal North America: 2Q10 positive EBITDA. Severstal’s North American EBITDA (SNA) amounted to $59 mn vs. $83 of EBITDA loss in 1Q10. SNA’s revenue increased by 24% q-o-q to $1,447 mn.

· Comfortable debt load. We forecast Net debt-to-EBITDA ratio at 1.5 for the year-end that implies a comfort debt load.

2. Fortum sells a 31% stake in St. Petersburg Energy Sales Company (PBSB) to Inter RAO (IRAO). NEUTRAL. We view the news as neutral for St. Petersburg Energy Sales Company, but note that the acquisition of a 31% Inter RAO’s stake will be followed by a formal buy-out offer to minority shareholders. Company as a part of Joint Energy Sales Company is owned by RusHydro (57.4%), but is managed by Inter RAO.

3. Gazprom Energoholding announced plans and projections in the utilities sector. POSITIVE. We believe any announced details Gazprom’s strategy regarding the utilities sector is a positive development, since this is partly clarifies the prospects of all affiliated generation companies. The bet on increasing value of assets, in our opinion, is beneficial for the affiliated gencos’ minorities, especially providing that the asset consolidation may lead to synergies. It should be noted that in some forecasts of Gazprom Energoholding is rather conservative.


TRADING ACTIVITY:

We churned quite a bit of volume yesterday on both ends of the stick in Norilsk, increased activity in the name is quite obvious. US bank hol put a lid on trading activity generally, there were quite a few cautions buyers round, not willing to get out of their foxholes into the open though. We were active in local stories of AVAZ and APTK variety.

Good US Open to you!
Attached Files
File Type: pdf SVST_1H10_review_06_09_10_eng.pdf (80.6 KB, 117 views)
File Type: pdf Equity_Daily_tkbc_07_09_10_eng.pdf (324.9 KB, 116 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 9, 2010, 8:04am   #65
 
china white's Avatar
Joined Jan 2003
Morning comment - 09.09.2010

china white started this thread Good morning! A sharper eye among us will notice that in EMs the stock-bond yield ratio is relatively high, meaning that EM Bonds are in a clear bubble, but EM equities are far from that. The earnings yield on the MSCI Emerging Market Index has climbed 1.16 percentage points to 7.05 percent this year, according to data compiled by Bloomberg through yesterday - bond yields in EMs, on the other hand, have fallen in tandem with declines in developed markets. The yield on JPMorgan EMBI+ Index, a benchmark for emerging-market debt, hit bottom last month at 5.40 percent, the lowest reading since at least 1997, according to Bloomberg.

EM stocks are indeed quite cheap by comparison with earnings estimates and asset values - which support our bullish stance for Russian and Frontier equities. But make no mistake - this will be a very different rally this time round. The times of "show me offers in ANY Russian blue chip, MINE, show me offer behind" is gone and gone for good. Russia has not got the size of Chinese market, nor the vibrancy of the Brasilian market. This will be a selective long play, with individual stories at the forefront.


CORPORATE NEWS:

1. Norilsk Nickel (GMKN): new shape of the shareholders' conflict. NEUTRAL

* "Save Norilsk Nickel". Ahead of Norilsk Nickel' EGM, yesterday RUSAL presented a detailed strategy aimed at increasing the value of Norilsk Nickel and protecting the interests of its all shareholders. Also RUSAL launched the web-site <http://www.savenornickel.ru/> www.savenornickel.ru. Thus, the conflict between Norilsk Nickel's key shareholders (Rusal and Interros) takes a new shape involving the other tools of a battle.

* Short-term driver. It should be noted that Norilsk Nickel's EGM is scheduled on 21 October, the register closing date is 10 September, i.e. this Friday. Obviously, RUSAL uses these measures in order to bring Norilsk Nickel's minorities on its side. We regard this news as neutral for Norilsk Nickel, since the conflict between its key shareholders does not have any impact on the company's operating activities. Meanwhile, this conflict could be a short-term trigger for the stock. Now we do not have an official recommendation on Norilsk Nickel.

2. Russian auto market slowed down. NEUTRAL

* Car and LCV sales slumped 4% m-o-m in August. The domestic auto market declined by 4% m-o-m to 168,627 vehicles due to the combination of factors: peak of summer holiday season, weather conditions (hot temperature and fire calamity) and related suspension of vehicle output in early August. At the same time, the Russian car market advanced 51% y-o-y last month that translated into a 14% y-o-y increase in total vehicle sales over 8M10 to 1.14 mn units.

* Sollers kept its leading position in recovery dynamics. The company expanded its vehicle sales by 37% y-o-y to 47,597 units over 8M10 vs 29% y-o-y for Russian peers vs 7% y-o-y for foreign peers.

* Autumn could spur auto market growth. We maintain our 2010 target for the Russian car and LCV market of 1.75 mn units that implies a 20% y-o-y increase.

3. FAS approved X5 Retail Group's (FIVE LI) deal to acquire three Kopeyka's subsidiaries. POSITIVE

* In expectation of green light for the deal. According to the independent appraiser's estimate, Kopeyka's business value is more than RUR34 bn (about $1.1 bn) or about 9.2 in terms of 2009 EV/EBITDA (X5 Retail Group trades at 15.7 2009 EV/EBITDA).

4. FAS has dropped investigations to Mechel (MTL) and Novolipetsk Steel (NLMK). POSITIVE

* FAS: Mechel and NLMK are "innocent".

* Favourable development for the companies. We regard this news as positive for Mechel and NLMK. It should be noted that in case of any violations, the companies would be threatened with the penalty of 1-15% of the revenue on the domestic market. We maintain our positive view on Mechel due to strong prices of coking coal. We recommend BUY the stock with the fair price of $29.5/ADR. We confirm HOLD recommendation for NLMK with the fair price of $3.21/share.


TRADING ACTIVITY:

Most notable from yesterday - we were buyers of telecoms all day yesterday, buyers of OGK-6, sellers in OGK-1,2. We crossed chunks in PIK, URSI, Volga and Centre Telcos, and TransNeft Prefs. Aggressive buyers of ROSN in the after-market.

Good trading to you!
Attached Files
File Type: pdf Equity_Daily_tkbc_09_09_10_eng.pdf (294.2 KB, 80 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 10, 2010, 7:51am   #66
 
china white's Avatar
Joined Jan 2003
Morning comment - 10.09.2010

china white started this thread Good morning! A couple of observations:

Looking for a success story? Check ARM Holding since 2007 (chart attached). As a guy who traded the stock on a daily basis back in 2000-02 (stop giggling ), I tend to keep a close eye on it – and for one main reason. We mentioned in our comment from 25 August (see Bloomberg link {NSN L7PD743PWT1C <GO>}) that developed nations are essentially already deep in a deflationary environment. Possibly the easiest and quickest way OUT of deflation is a revolutionary change of “consumer’s base basket”. This is happening and happening rapidly, and it is chip and gadget makers that are at the forefront of such change. No wonder ARM, the UK designer of semiconductors used in Apple’s iPhone – and Apple products are spearheading that revolution in consumer’s basket – flies to the sky after unveiling a new Cortex-A15 MPCore Processor. This new product is a potential game changer offering five times the performance of existing smartphone processors. Add to that winning an order from Samsung. for a GPU socket in their latest application processor chip – and you cannot but get to the conclusion that it is companies capable of rapidly changing the consumer’s basket that are the success stories of today.

Interestingly enough, HMV on the other hand, is another clear example of this ongoing revolution in consumer’s basket. Their music and DVD sales at outlets open at least a year in the UK and Ireland fell 15 percent in the 19 weeks ended Sept. 4. Why buying a DVD when you can listen to your fave track on your Apple’s iPhone with an ARM chip in it?


THING TO NOTE IN RETAIL SECTOR: We comment on X5 developments below – and to be frank the alternative of Wal-Mart stepping in to snap up Kopeika seems a pure craze to many. However they successfully played this sort of game in Mexico, creating 2nd largest Mexican company by cap - WALMART DE MEXICO (WALMEXV MM). Another success story by the way I would not be entirely snubbing this possibility!


CORPORATE NEWS:

(for details see our Daily note at http://www.tkbc.ru/eng/research/rese...tock_analysis/ or in Bloomberg at {TKBC <GO>})

1. The Russian government may extend cash-for-clunkers program until 2012. POSITIVE

* State reserved RUR13.5 bn for srappage certificates in 2011 federal budget. According to Vedomosti, the Russian government plans to allocate RUR13.5 bn for the cash-for-clunkers program in 2011 federal budget. We remind that the state launched RUR10 bn cash-for-clunkers program on 8 March 2010 to support domestic car makers. We believe that this program is one of the most successful initiatives of the Russian government. Thus, the first part of 200,000 scrappage certificates was fully used by the end of June vs. autumn as it was expected.

* Supportive for AVTOVAZ and IzhAuto. AVTOVAZ is a key beneficiary of cash-for-clunkers program (above 80% of scrappage certificates provided for LADAs). It will also be positive for IzhAuto, which in September launched the assembly of Classica models (LADA 2105/2107) to realize AVTOVAZ strategy to cancel Classica production next year and commission new Lada Granta by the end of 2011.

2. FAS allowed X5 Retail Group’s (FIVE LI) to acquire Kopeyka. POSITIVE

* FAS gave the green light to acquire Kopeyka, except of some stores. We remind that according to the independent appraiser’s estimate, Kopeyka’s business value is more than RUR34 bn (about $1.1 bn) or about 12 in terms of 2009 EV/EBITDA (X5 Retail Group trades at 15.7 2009 EV/EBITDA).

3. Gazprom’s (GAZP) board approves changes to 2010 investment program. NEUTRAL

* Investment program is increased by 13%, neutral. The investment program was increased by 13% from the level approved in November 2009 to RUR 905.3 bn (around $30 bn). In production segment, Gazprom’s priority for 2010 is development of Bovanenkovo and Shtokman fields, in transportation – construction of pipelines under East gas program (Sakhalin-Khabarovsk, etc.), as well as Nord Stream and South Stream. According to Vedomosti, Gazprom forecasts non-CIS exports at 140-145 bcm, unchanged from the 2009 level, – this is in line with Gazprom’s previous guidance at 1Q10 results conference call. The recovery in gas production this year (in January-August, Gazprom’s gas output increased by 16% y-o-y) and favorable domestic gas prices (regulated gas tariff for industrial consumers set at $76/mcm for 2010) should support the company’s financials this year.

4. Veropharm’s (VRPH RU) 2Q10 and1H10 IFRS results: margins soared well above the expectations! POSITIVE

* Positive surprise in margins at all-time highs. Yesterday Veropharm reported its unaudited 1H10 IFRS results, which came well above our and market consensus estimates in terms of margins. The company’s 2Q10 revenue increased by 23% y-o-y in ruble terms (vs. only 5% y-o-y growth in 1Q10, when the company acknowledged the underproduction of several categories of drugs due to the lack of ingredients as a result of ingredients suppliers’ problems). Thus, 1H10 sales growth totaled 16% y-o-y, which is above the overall market growth of 4%). Veropharm’s 2Q10 gross margin soared to 73.6% (vs. our conservative forecast of 70%) on considerable margins expansion in all segments and further increase in share of high-margin prescription drugs sales (amounted 75% of total sales in 2Q10 at the expense of decreased share of lower-margin traditional drugs and adhesive bandages sales). Thus, Veropharm gross margin peaked to 73.3% in 1H10, hitting all-time high. 2Q10 SG&A expenses returned back to normal level and totaled 33.5% of sales after they shot up to 55% in 1Q10. 2Q10 EBITDA margin jumped to 42% that helped 1H10 EBITDA margin to improve to 34.3% (vs. 33% in 1H09). Veropharm’s net margin increased to 27.3% in 1H10 that demonstrates 34% y-o-y growth in the company’s EPS (in dollar terms).

* We maintain our BUY recommendation for the stock with end-2010 target price at $47 per share, which implies more than 25% of upside potential. Veropharm relative valuation in comparison with its EM peers implies almost a 40% discount on the basis of 2010E EV/EBITDA.

5. Gazprom’ s entity filed a lawsuit against the offshore of IES Holding. NEUTRAL

* Lawsuit as a tool. Structure of Gazprom (GAZP) sued at law on RUR16.877 bn to affiliated with the IES Holding Offshore Berezville Investment Ltd, which owns a 11.29% stake in Volga TGK-7 (VTGK), Interfax reported. The reason for filing a claim is not specified. According to the source of Interfax, Gazprom may claim a part of the stake in TGK-7, which IES Holding acquired from RAO UES at the time of restructuring. Currently, IES, according to unofficial sources, owns about 48 -50% of the generation company, and Gazprom has a minority interest. A source familiar with the negotiations between Gazprom and IES on TGK-7, told Interfax that the parties agreed on their positions when filing a claim.

* There are two possible beneficiaries. Earlier, Gazprom has repeatedly stated that the company may be of interest of controlling TGK-7. IES is ready to keep its stake in the generation company, while until now it has not planned to include it in the consolidation scheme of generation assets. In addition to the structures of Gazprom's, Inter RAO UES expressed its interest to TGC-7 and is likely pasta receive a 30% stake in the generation company, which is on the balance of FGC.

* Waiting for changes. We believe that the news is neutral for TGK-7’s stock performance, and in our view, in the medium term we may expect changes in TGK-7 shareholder structure. However, it is premature to make any conclusions about the prospects of such events for minority shareholders, in our view, because the changes may be as a consequence of a sale or an assets swap between the parties, not involving cash participation.


TRADING ACTIVITY:

We churned a good chunk in PIK Group yesterday, enough to say we digested daily MICEX volume in the paper. We traded quarter bil of URSI, Western accounts were hunting for TNK-BP, we traded almost a mil shares, BID OVER in 3 mil shares for today. Also, moving up the tier ladder , we worked Western bids in Gazprom, RosNeft and SpermBank Prefs – as UK brokers call it


Good end to trading week to you!
Attached Thumbnails
arm_successstory.gif  
Attached Files
File Type: pdf Equity_Daily_tkbc_10_09_10_eng.pdf (362.2 KB, 99 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 13, 2010, 8:41am   #67
 
china white's Avatar
Joined Jan 2003
Morning comment - 13.09.2010

china white started this thread Good morning! Guess where the largest open interest on VIX options was? Sept $45 calls! That clearly shows some investors were betting on the gauge to double the current level by this week's expiration! On Friday, about 145,000 calls traded in VIX options, which are priced off of VIX futures, versus 46,000 puts. Futures on VIX are pricing in a three-month gain of 31 percent and contracts based on swings in Europe and emerging-market equities have risen to near records, data compiled by Bloomberg show.

Complete and utter pessimism. BUT - five of the seven times the VIX gap widened this much, S&P rose 11 percent on average in the next six months. One exception was May 2008, two months after Bear Stearns collapsed and before a 40percent drop - we all surely remember that Best time to purchase stocks is when pessimism is at its high, even more importantly; strong corporate results and forecasts for the biggest surge in corporate profits in two decades are set to buoy equities.

To be frank I have rarely seen such a nice bundle of extreme fear and strong micro - nice for global equities. Even the slightest whimsical improvement in macro (like evidence of strengthening domestic spending in China or positive perception of Basel III meetings on European bank capital reform or even Greek PM's comments at the weekend) is poised to "float all boats" in the equity harbour



THINGS TO WATCH: Banks first and foremost on the back of capital reforms. Also, tomorrow's inflation data, with a rise expected up to 3.2 per cent being the consensus expectation, is a potential pivot event for the week so volumes could remain relatively light ahead of this.


CORPORATE NEWS

(for details see our Daily note at <http://www.tkbc.ru/eng/research/research/
stock_analysis/> http://www.tkbc.ru/eng/research/rese...tock_analysis/ or in
Bloomberg at {TKBC <GO>})

* GAZ Group (GAZA) launches its own cash-for-clunkers program. POSITIVE

* Mikhail Prokhorov to get control over Open Investments (OPIN RU). NEUTRAL

* General Prosecutor's Office of Russia has checked Norilsk Nickel (GMKN) AGM.
NEUTRAL

* TMK (TMKS) posted strong 1H10 financials. POSITIVE

* X5 Retail Group (FIVE) continues to seek new CFO. NEUTRAL

* FAS approved Wimm-Bill-Dann (WBDF) application to acquire two regional milk
producers. POSITIVE

* Magnit's (MGNT LI) 8M10 trading update: spectacular traffic growth in
discounters. POSITIVE

* Holding MRSK (MRKH) expects a partial transition to RAB from 1 October.
POSITIVE


TRADING ACTIVITY:

We churned 700K DRs of Gazprom on Friday, we worked large INTERNATIONAL buy orders in ROSN - in upto 5 mil shares - I am BID OVER into London open today. We saw 2 Western sellers in Protek (PRTK RU), they were clearly rolling their exposure into Magnit. In utilities we were sellers of OGK 1,2, buyers of No 6, buyers in size in MRSK Volga. In telecoms we were looking to buy Centre (ESMO RU) and Yug (KUBN RU) and sell Sibir (ENCO RU). In Real Estate, we worked big selling orders in local PIK (PIKK RU), upto 1 mil shares, the guy was about 3% above market, and we were also sellers in local HALS.


Good week ahead to you!
Attached Files
File Type: pdf Equity_Daily_tkbc_13_09_10_eng.pdf (432.3 KB, 112 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 14, 2010, 8:01am   #68
 
china white's Avatar
Joined Jan 2003
Morning comment - 14.09.2010

china white started this thread Good morning! Straight to the bacon - Stocks Rally on Basel bank reform, China growth and corporate deals. First 2 boiling down to removing investors’ fears about CRAP MACRO – the last one showing GREAT MICRO.

I will not spend time here on the corporate deals that we all know – the likes of HP and Hertz. What I find interesting is EMs starting to acquire targets in developed world. We mentioned before (see Bloomberg link {NSN L7PD933PWT1C <GO>}) that deflationary environment in G7 is not a fear, it is a reality. What can possibly stave it off? One thing – EMs where you can still get double-digit returns. EMs have all the capacity to help out developed nations not just on the front of liquidity, but also deflation. Deflation in developed nations and inflation in EMs? Isn’t that counter-intuitive? But that seems to be the world we are living in. "Get the money now just in case rates are headed up in 2011" seems to be the corporate mantra in Sao Paolo and Rio. That is giving Brazilian companies plenty of cash to invest and is fueling a boom in acquisitions by Brazil's companies. Recent news that an investment group backed by Brazilian money, 3G Capital, will acquire Burger King for $3.2 billion is just one more sign of that trend.


CORPORATE NEWS:

(for details see our Daily note at http://www.tkbc.ru/eng/research/rese...tock_analysis/ or in Bloomberg at {TKBC <GO>})


* NCSP’s (NCSP LI) cargo turnover slightly decreased over 8M10. NEUTRAL. The cargo turnover declined in August.

* OGK-4 (OGKD) posted solid 1H10 IFRS results. POSITIVE. Market liberalization and efficiency – key factors for financial improvement. OGK-4 is still out top-pick.

* RusHydro (HYDR) plans to issue additional 1.86 bn shares. NEUTRAL. We believe that the news is neutral for the stock performance due to the small volume of issue. We reiterate our BUY recommendation on RusHydro’s shares with the target price of $0.0717/share, which implies a 34% upside potential.

· Bank St Petersburg’s (STBK) 2Q10 IFRS results – less conservative than expected. POSITIVE. 2Q10 financials – better than the trend.

· Mechel (MTL) raised the $2 bn pre-export facility. POSITIVE. We recommend to HOLD Mechel’s common shares and ADRs with the fair price of $29.5.

· Bashneft’s (BANE) 2Q10 IFRS results: leaving room for some questions. NEUTRAL.

· Severstal (SVST LI) to purchase 43% of Crew Gold within next 2 days. POSITIVE. We recommend to HOLD Severstal with the fair price of $15.5/GDR.

* NPO Saturn (satr) to increase charter capital by 4.2 times and to sell the stakes in PAO Inkar (inka) and UMPO (UFMO). New share issue’s placement price is by 2.6 times higher than the market one.

· X5 Retail Group (FIVE LI) is ready for early refinancing of $1.1 bn syndicated loan. POSITIVE.


TRADING COMMENT:

We were sellers in Gazprom and buyers in VTB – both in good sizes. Were looking to buy OGK-4 and local Magnit. We crossed up a few chunks in ROSN with Western accounts on the buying end of the stick. In banking sector’s less liquids we worked several axes in usual suspects – VZRZ and STBK.


Good trading to you!
Attached Files
File Type: pdf Equity_Daily_tkbc_14_09_10_eng.pdf (452.2 KB, 169 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 20, 2010, 7:48am   #69
 
china white's Avatar
Joined Jan 2003
Morning comment - 20.09.2010

china white started this thread Good morning! Some silly - but may be not that silly after all - statistics. When a Democrat occupied the White House and Republicans controlled Congress, the Dow Jones Industrial Average advanced an average of 9.6 percent a year, courtesy of Ned Davis research firm. Not just the impressive number but also the fact that stocks historically have performed best in such a political set-up.

Now health-care. I mentioned in our comment from August 23 "Markets vs. Economy" (see e.g. Bloomberg link {NSN L7LFFK3PWT1C <GO>}) that companies are also slow to hire because they are still unclear on how much health-care reform is going to cost per employee. If that is cleared up favourably - it will be a massive burden off hiring shoulder! And the lack of job growth is the most ominous macro hurdle for currently very strong micro. With a power shift in November favouring GOP investors will have to try to determine whether a Republican Congress will reverse the health-care overhaul passed this year. Obama will certainly veto any attempt to repeal it. my opinion, If indeed GOP gets enough votes to pass a bill attempting to repeal the health-care legislation, but would lack the votes to override a presidential veto, this MAY just add to uncertainty putting a lid on the job growth.

Good and bad - as always It is tempting to drum up importance of tax-cut extension delay and slumping consumer sentiment on the back of that - but do not forget - 1) tax in the UK e.g. is already hiked up and it is hardly preventing FTSE from taking part in this rally; and 2) market treated as a non-event UofM consumer sentiment reading dropping to a one-year low of 66.6 on Friday. More on taxes in tomorrow's note.


CORPORATE NEWS:

(for details see our Daily note at <http://www.tkbc.ru/eng/research/research/stock_analysis/> http://www.tkbc.ru/eng/research/rese...tock_analysis/ or in Bloomberg at {TKBC <GO>})

* Polyus Gold (PLZL) 1H10 financial results. NEGATIVE

* Raspadskaya (RASP) 1H10 cash costs up by 44%. NEUTRAL We recommend to BUY Raspadskaya with the fair price of $8.5/share.

* Norilsk Nickel (GMKN) 2011 capex is estimated at $3 bn in 2011 increase by 50% y-o-y. NEUTRAL

* Ministry of Finance opposes tax breaks for Rosneft's (ROSN) Vankor. NEGATIVE Special export duty introduced for East Siberia.

* Standard crude oil export duty formula at Urals price above $25/bbl, $/bbl = [Urals price - 25] x 0.65 + 4

* Special crude oil export duty formula for East Siberian greenfields, $/bbl = [Urals price - 50] x 0.45

* Lukoil (LKOH) will be bidding for Trebs and Titov alone. NEUTRAL Lukoil's competitive advantage - infrastructure in Timan-Pechora. The company plans to participate alone in the auction of two major fields Trebs and Titov holding roughly 1 bbl of C1+C2 crude oil reserves.

* Lukoil (LKOH) to decide on ConocoPhillips' option this week. NEUTRAL

* Ammofos (ammo) increased production of mineral fertilizers over 8M10 by 8% y-o-y.


TRADING COMMENT:

On Friday we started the day with buy-orders in Gazprom, Lukoil, Norilsk Nickel, Surgut and DRs of Novorossyisk Sea Port (NCSP) where we crossed half of it with natural sellers; since the very opening we also had been working orders to sell Rosneft, Sberbank, VTB, Transneft prefs. Later on turned buyers in AFK Sistema locals and regional telecoms (where we crossed ~200 mln of URSI, 750k NNSI, 2,5 mln SPTL, 1 mln ESMO, 100k in RTKMp, 200k of ESPK, though ended the day still with 100k of ESPK left to sell). Today is the cut-off date for URSI, NNSI, ESMO - holders of these stocks will be paid 9m 2010 dividends - keep in mind that today all they trade ex-div OTC. In utilities sector we crossed 25 mln in Hydro, 250 mln in Inter RAO, 100 mln in OGK-1, 10 mln in MRSK Volga, 80 mln in Federal Grid Co, 10 mln in OGK-4 and 200k in Bashkir Energo, remain buyer in Suek-Kuzbass - quite a lot of activity in comparison to previous days in utilities. At the end of the day had some small sellers in Russian Vodka producer Synergy (SYNG), Rosinter and Bank S. Petersburg prefs, Kalina, Ulyan Auto.


Good start to the week to you!
Attached Files
File Type: pdf Equity_Daily_tkbc_20_09_10_eng.pdf (401.2 KB, 139 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Old Sep 21, 2010, 8:46am   #70
 
china white's Avatar
Joined Jan 2003
Morning comment - 21.09.2010

china white started this thread Good morning! National Bureau of Economic Research announced yesterday that the recession that began in December 2007 ended in June 2009 making it the longest recession since World War II. With all due respect – if you believe that, you should be selling now! We mentioned before (see e.g. Bloomberg link {NSN L7LFFK3PWT1C <GO>}) that IN MANY WAYS we are still DEEP in the recession, and it is strong micro / corporate earnings that point to the near end of this recession. I mentioned some peculiar market reaction to UofM on Friday - market treated as a non-event UofM consumer sentiment reading dropping to a one-year low of 66.6 on the back of tax-cut uncertainty in the US!!

Many view this as writing on the wall that this is it for the recession and things will only get better from here. As always – markets are the first to run ahead of the economy. This is perhaps the REAL reason for my bullishness here.


CORPORATE NEWS:

(for details see our Daily note at http://www.tkbc.ru/eng/research/rese...tock_analysis/ or in Bloomberg at {TKBC <GO>})

- Far East Telecom (ESPK) 1H10 IFRS: strong on top line. NEUTRAL For the cheapest entry into the enlarged Rostelecom we advice to purchase commons in CenterTelecom (ESMO – UR) and prefs in South Telecom (KUBNP – UR) and North-West Telecom (SPTLP – UR).

- Polymetal (PMTL): new acquisitions in the Far East. POSITIVE

- LSR Group (LSRG LI) 1H10 IFRS results preview. NEUTRAL We maintain our BUY recommendation on the stock. Our end-2010 target price for LSR Group is $11.4/GDR and $57.0/share per share.

- Arbitration court of Perm region vetoed additional share issue of Chusovoy Metallurgical Works (CHMZ).


TRADING ACTIVITY:

The first half of the day yesterday was unusually dull – although we traded 400k of Gazprom, 55k of Norilsk Nickel, 250k of ROSN – here we were buyers; sold 75k of Lukoil on exchange. Later on close to the noon sellers came in Sberbank, Transneft prefs. In mid & small caps we had a bit more activity: crossed 300k in AFLT, 2 mln KZRU, 70k of Bank St. Pete prefs (STBKPA RU), 150k of Protek (PRTK RU); in telecoms sector continued to be buyers – crossed 65 mln of Uralsvyaz (URSI RU) (international buyers, local seller), crossed 20 mln of Siberia Telecom (ENCO RU) between domestic accounts, kept on buying Center Tel (ESMO RU), Volga Tel (NNSI RU), South Tel (KUBN RU) and North-West Tel (SPTL RU). In utilities sector we had mostly clients’ activity in wholesale generation companies – we buyers in OGK-1, OGK-4, OGK-6, Mosenergo (MSNG RU), MRSK Center (MRKC RU), and sellers in OGK-2, OGK-5, Inter RAO, Federal Grid, MRSK Urals (MRKU).


Good trading to you!
Attached Files
File Type: pdf Equity_Daily_tkbc_21_09_10_eng.pdf (281.6 KB, 97 views)
__________________
"It's kind of fun to do the impossible" - Walt Disney
china white is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Anyone know where I can get access to RTS futures (Russia)? fantantric General Trading Chat 4 Oct 25, 2010 10:07am
Liquid Futures Contracts ImranQ Futures & Options 3 Sep 3, 2010 7:04pm
Russian RTS index: Is it covered by a spread betting product? rutherford Indices 3 Jul 19, 2010 10:20am
Liquid Capital or Liquid Trading? Black Swan General Trading Chat 3 Jan 27, 2010 2:40pm
Which instrument is most liquid/volatile/popular? johanesw General Trading Chat 9 Jan 8, 2009 9:28am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)