Russian Stock Market Blog

Daily Review. 12th November, 2009

2009-11-12T08:07:00.001+03:00

Domestic equities finished Wednesday with moderate losses. An upswing at the open was fed by external bullishness on the back of China’s strong economic data and as the session wore on the benchmarks grew on rebounding oil prices. However, a correction set in on the oil market near the final bell which triggered a downturn in Russian stocks. As a result, the indices landed in negative territory, with the RTS Index inching down 0.18% and the MICEX Index easing 0.50%.

O&G plays drifted lower as the oil market corrected down near the closing bell, as Gazprom dipped 1.2%, Rosneft dropped 0.2% and Lukoil edged down 0.6%. As for financials, Bank VTB led the underperformers, shedding 2.9%, while Sberbank ended 0.4% lower. Steel makers largely outperformed, as MMK was up 0.9%, NLMK advanced 0.7% and Severstal added 0.9%. MRSK Holding securities surged 4.6% on reports the utility’s shares could be added to the MSCI Russia Index.

On Wednesday US benchmarks closed higher with gains averaging 0.5%. The market was cheered by impressive industrial production numbers out of China and also US Fed statements which could suggest the US Fed is prepared to keep the federal funds rate close to zero for a long time. Asian exchanges are moving higher this morning on better-than-expected labor market data from Australia. Crude prices nearly won back yesterday's losses on a weaker dollar. Against this backdrop, gold prices rose to new highs.

We think Thursday morning’s news flow looks favorable for the Russian equity market. If crude continues to climb, this will lend support to both O&G plays and the market as a whole. With gold on the move, gold miners could outperform today. EU manufacturing numbers, US jobless claims and petroleum stockpiles could impact market sentiment in today’s session.

Daily Review. 11th November, 2009

2009-11-11T10:12:00.000+03:00

Domestic equities opened on a mixed note Tuesday, but near mid-session stocks got back on the growth track, with the RTS Index adding 2.08% and the MICEX Index advancing 1.39%.

O&G names rebounded on rising oil prices, as Gazprom grew 0.8%, Rosneft added 2.4% and Lukoil inched up 0.2%. In the financial segment, Bank VTB saw robust demand, up 3.8%, while Sberbank ended 0.9% higher. Steels followed the market, with MMK advancing 1.1%, NLMK jumping 2.2% and Severstal edging up 0.9%.

US benchmarks showed mixed performance on Tuesday. Most negativity came from lackluster earnings reports released by a number of large US corporations. Asian indices are mostly higher this morning on positive macroeconomic data, as retail sales and manufacturing numbers in China cheered investors. Against this backdrop, oil prices are back on the rise, additionally buoyed by a weaker dollar.

We believe Wednesday morning's news flow is to a large extent upbeat for the Russian stock market. If crude continues to climb, this will shore up O&G plays. And with gold prices heading higher, gold miners look set to outperform today.

Daily Review. 10th November, 2009

2009-11-10T07:40:00.000+03:00

Domestic equities moved resolutely higher on Monday amid bullishness on global stock and commodity exchanges, with the RTS Index edging up 0.16% and the MICEX Index soaring 5.05%.

O&G names posted gains following an upsurge in oil futures, as Gazprom climbed 3.9%, Rosneft jumped 6.6% and Lukoil rallied 5.2%. Banking names ended the session among the outperformers, partly on the back of a stronger ruble, as Sberbank surged 6.2% and Bank VTB added a hefty 8.1%. Steel makers advanced in stride with the market, with MMK rising 4%, NLMK gaining 5% and Severstal shooting up 4.7%.

Bullish sentiment held sway on the US stock market Monday. Key benchmarks added an average 2% on reports G20 member states will not phase out stimulus programs. Asian indices are also on the rise. Optimism came from better-than-expected auto sales numbers and real estate prices in China. Commodity markets experienced a correction after a steep rise, with gold and oil prices retreating. Brent contracts are currently trading in the vicinity of USD 77.30 per barrel.

We think Tuesday morning’s news flow looks ambivalent for the Russian stock market. On the one hand, upside on US and Asian exchanges could lend support to domestic equities. On the other hand, taking into account Monday’s rally, a contraction in US index futures could spark a correction. If oil prices keep falling, this could exert an adverse impact both on the market as a whole and O&G plays.

Daily Review. 9th November, 2009

2009-11-09T07:36:00.000+03:00

Russian benchmarks closed in negative territory Friday. Bearish trends seen throughout the session gained momentum near the closing bell after the US Labor Department released worse-than-expected unemployment numbers, with the RTS Index inching down 0.05% and the MICEX Index easing 1.32%.

O&G names moved lower on falling crude futures, as Gazprom gave up 2.8%, Rosneft shed 0.6% and Lukoil sank 2.8%. Domestic banking names emerged among the outperformers, with Sberbank edging up 0.2% and Bank VTB adding 0.5%. Steels moved lower along with the market, as MMK declined 2.3%, NLMK dropped 0.5% and Severstal skidded 0.9%.

Despite disappointing unemployment numbers, US equity benchmarks managed to Friday’s session in positive territory, as commodities led the market higher. Asian exchanges also look bullish this morning on reports G20 nations are not going to scale down anti-crisis measures. Crude prices took a sharp leap on fears oil supplies from Mexico could be cut as a powerful hurricane is drawing near. Brent contracts are currently trading around USD 76.80 per barrel.
We think Monday morning’s news flow is favorable for the Russian equity market. Specifically, O&G plays could outperform today taking into account an uptick in crude oil prices. Metals could also see gains on the heels of rising commodity markets, as positive developments in precious metal prices could shore up Polyus Gold and Polymetal.

Daily Review. 6th November, 2009

2009-11-06T07:10:00.000+03:00

Domestic equities turned bullish Thursday on the back of a positive external news flow, while in the second half of the session after strong macroeconomic came in from the US the benchmarks advanced at a more confident pace, with the RTS Index inching up 0.03% and the MICEX Index surging 3.29%.

O&G plays locked in gains on an upturn in oil contracts, as Gazprom gained 3.3%, Rosneft jumped 3.6% and Lukoil climbed 3.1%. Banking names went up in line with the market, as Sberbank shot up 2.6% and Bank VTB closed 3.4% higher. The performance of metal issuers nearly mirrored market trends, with MMK soaring 4.5%, NLMK advancing 2.2% and Severstal ending 3.8% higher. AvtoVAZ stocks soared 15.7% on reports the automaker will receive state financial assistance.

US stock indices posted average 2% gains Thursday on positive economic data. Investors were cheered by lower-than-expected jobless claims and improved labor productivity. Against this backdrop, Asian benchmarks are on the rise this morning with additional gains coming from a revised forecast for the national economy by the Reserve Bank of Australia. Commodity markets also look strong today, with Brent futures currently trading around USD 78.60/bbl.
We think Friday morning’s news flow is favorable for the Russian equity market. Domestic banking names could outperform today after sharp gains by US financials. Crude prices are moving higher, but are still below price levels at which Russian exchanges closed yesterday. For this reason, O&G plays could lag behind the market. US unemployment numbers, due out at 4.30 pm Moscow time today, will be a key market driver.

Daily Review. 5th November, 2009

2009-11-05T11:28:00.001+03:00

Russian equities were back in bearish mode on Tuesday. The market was still under pressure from a decline in European bourses and falling oil prices. The RTS Index managed to end the session 0.83% higher on a stronger dollar, while the MICEX Index shed 3.78%.

O&G names moved lower on falling crude prices, as Gazprom sank 3.8%, Rosneft pulled back 4.2% and Lukoil plunged 3.7%. Banking names underperformed on reports UBS posted losses and RBS needs additional state aid, with Sberbank diving 4.8% and Bank VTB sinking 6.1%. Steels closed mostly lower along with the market and slightly outperformed, as MMK declined 2.8%, NLMK gave up 6.3% and Severstal ended 3.6% lower.

US benchmarks, except for the NASDAQ, finished Wednesday in positive territory. Support came from the Fed’s decision to hold the federal funds rate steady. Asian exchanges are in decline this morning, with losses mostly seen in consumer and financial plays. Crude contracts are retreating now, with Brent futures trading around USD 78.20 a barrel.

According to our outlook, Thursday morning's news flow looks rather unfavorable for the Russian stock market. However, the sharp rise in oil prices on Wednesday could shore up the benchmarks. Softening demand for global financials could negatively impact domestic banking names. A string of macroeconomic data capable of driving the market is due out today. Specifically, rate decisions by the Bank of England and the ECB will be made public, and EU retail sales and US jobless claims will also come out.

Daily Review. 3rd November, 2009

2009-11-03T09:40:00.000+03:00

Domestic equities posted gains Monday, clawing back some of last week’s losses, with the MICEX Index advancing 2.4% on the back of a favorable external news flow.

The list of advancers was topped by recent laggards, steel makers, with MMK surging 4.9%, NLMK soaring 4.7% and Severstal climbing 3%. Banking stocks, despite gradual weakening of the national currency, moved higher along with the market, as Sberbank gained 2.9% and Bank VTB grew 1.9%. O&G plays, except for Gazprom (up 2.9%), slightly underperformed, was Lukoil edged up 0.7% and Rosneft ended 1.6% higher. Rostelecom prefs, up 5.3%, remained in high demand among investors ahead of the reorganization in the telecom sector.

US benchmarks closed in positive territory on Monday, with support coming from the overall positive macroeconomic news flow. The S&P 500 Index added 0.6%, with consumer and commodity stocks leading the outperformers. Asian exchanges are mixed this morning, as investors are concerned that more state stimulus measures will be cancelled after another cash rate increase by the Reserve Bank of Australia. Prices climbed on commodity markets Monday, as WTI oil contracts rose above USD 78/bbl and gold hit another record.

According to our estimates, Tuesday morning's news flow looks moderately negative for the Russian stock market and we expect a modest correction in most liquid names at the open. O&G and precious metal stocks will likely see the strongest demand.

Daily Review. 2nd November, 2009

2009-11-02T07:16:00.000+03:00

Domestic equities moved lower after Friday’s opening, driven by a downswing on European exchanges and falling oil prices, and more negativity rolled in from a pullback in US benchmarks at the open and worse-than-expected economic data out of the United States. As a result, the RTS Index skidded 2.08% and the MICEX Index sank 4.24%.

A retreat in crude prices was the main reason for a retreat in O&G plays, as Gazprom slid 4.5%, Rosneft plunged 4.3% and Lukoil plummeted 4.7%. Banking names lagged slightly behind the market, with Sberbank pulling back 4.5% and Bank VTB decreasing 5.7%. Steel makers followed the market, but mostly outperformed, as MMK was down 2.1%, NLMK lost 2.5% and Severstal plunged 4.6%.

Bearish trends again held sway on the US stock market Friday, with the benchmarks losing more than 2.5%. The main negative factor was a decline in consumer spending for the first time in five months. Asian markets are also lower this morning as prices ease on commodity exchanges. Additional negativity came from news that CIT Group, a large US financial company, went bankrupt. Crude futures corrected down slightly on a strengthening dollar, with Brent contracts currently trading around USD 75.80 per barrel.

We think Monday morning’s news flow is ambiguous for the Russian stock market. After steep losses Friday domestic plays could experience an upswing, which could be backed by rising US index futures, although bearishness on Asian exchanges will put pressure on the market. If the upturn in oil prices continues, this could drive not only O&G plays, but also the market as a whole. US construction costs, due out at 6 pm Moscow time today, could also impact market sentiment.

Daily Review. 30th October, 2009

2009-10-30T07:35:00.000+03:00

Domestic equities opened lower on Thursday, but investor optimism fed by better-than-expected economic data from the US in the second half of the session prevented liquid names from sustaining further losses, as the MICEX Index gained 3.1% and the RTS Index edged up 0.6%.

The day’s standout gainers were the recent laggards, steel stocks, as MMK climbed 4.6%, NLMK leapt 6.7% and Severstal added 3.4%. Domestic banking names also outperformed, with Sberbank jumping 3.9% and Bank VTB climbing 4.4%. O&G plays posted advances in line with the overall market trend, as Gazprom rose 3.1%, Lukoil grew 2.5% and Rosneft surged 2.4%.

After several days of losses American exchanges were back in rally mode Thursday after the release of positive GDP numbers for the third quarter. Key stock indices soared 2-2.5%, with financials leading the gainers. Asian markets are also seeing robust gains this morning, with Chinese stocks leading the way. Commodity markets also demonstrated a positive response to the steady expansion of the American economy, as WTI futures grew above USD 80/bbl and all primary groups of non-ferrous metals also moved higher.

We believe Friday morning's news flow looks upbeat for the Russian market and we expect blue chips to extend gains in early trading. O&G plays and banking names could top the list of outperformers today. In the second half of the session all eyes will be on US consumer spending for September.

Daily Review. 29th October, 2009

2009-10-29T07:24:00.000+03:00

As global investors turned bearish Wednesday the Russian stock market was hit by a heavy wave of sell-offs, with the RTS Index pulling back 3.7% and the MICEX Index diving 6%.

O&G and banking plays traded in stride with the market, with Gazprom plunging 5.9%, Lukoil plummeting 6%, Rosneft diving 5.3%, Sberbank shrinking 5.5% and Bank VTB declining 6.6%. Steel-making issuers lagged behind the market under pressure from the downturn in steel names, as MMK saw 7.6% sliced off its market cap, NLMK skidded 10.1% and Severstal tumbled 8%. Telecoms continued to outperform, with Rostelecom dipping 0.7% and Uralsvyazinform losing 4.8%.

Global equities were engulfed in a sell-off on Wednesday, with additional downward pressure on US exchanges coming from weaker-than-expected new home sales in September. The S&P 500 Index sank 2%, while financials and commodity plays led the market lower. Asian equities are also trading in negative territory this morning, with the benchmarks down as much as 2.5%. A weaker dollar coupled with concerns that the pace of economic recovery is losing momentum exerted an adverse impact on commodities, with WTI futures retreating to USD 77/bbl amid equal losses in primary groups of non-ferrous metals.

According to our estimates, Thursday morning's news flow looks essentially neutral for the Russian market and we expect stock prices to stabilize at the open. During the trading session liquid names could make an attempt to recoup losses of the previous sessions, but bullish trends need external support (US GDP data for 3Q is due out later today). O&G plays and banking names stand a good chance of outperforming today.

Daily Review. 28th October, 2009

2009-10-28T07:27:00.000+03:00

Domestic equities trended lower Tuesday under pressure from the external news flow, with the RTS Index sinking 3.7% and the MICEX Index declining 1.8%. Investors are cautiously assessing the consequences of the gradual rolldown in government support programs by the world’s largest economies.

O&G plays followed the market lower, as Gazprom shed 2.1%, Lukoil eased 1.1% and Rosneft declined 1.8%. Banking stocks slightly outperformed, reaping gains on optimistic expectations of CBR officials, as Sberbank eased 0.5% and Bank VTB ended 0.8% lower. Norilsk Nickel’s stocks (off 0.3%) gained support from high prices for the holding’s primary commodity groups. Steel makers led the decliners, as MMK plunged 4%, NLMK pulled back 3.9% and Severstal lost 4.1%.

US benchmarks moved further south Tuesday on fears the global economic recession will lose momentum, with the S&P 500 Index dipping 0.3%, while commodity and consumer names underperformed. Bearish trends spilled over to Asian exchanges this morning, with indices down 2%. Commodity markets remained stable, as oil futures continued to trade in the narrow band of USD 78-80 a barrel, while base metal prices remained largely unchanged.

According to our estimates, Wednesday morning's news flow looks unfavorable for the Russian stock market and the downturn in most blue chips will likely continue in early trading. External news could put the heaviest pressure on metal and banking stocks. O&G plays have a chance to slightly outperform as crude oil prices stay high. US durable goods orders and home sales for September are due out in the second half of today’s session, which could have a substantial impact on market sentiment.

Daily Review. 27th October, 2009

2009-10-27T07:34:00.000+03:00

Trading was quite uneventful for the most part of Monday’s session, but a deteriorating external news flow just ahead of the closing bell intensified sell-offs in most liquid names. As a result, the MICEX Index dropped 0.5%, while the RTS Index, up 1%, closed before reflecting a change in the external environment.

O&G plays, except for Gazprom (+0.2%), landed in negative territory, as Lukoil dipped 1.4%, Rosneft declined 0.5% and Surgutneftegaz eased 0.3%. No single trend emerged in state-owned banking names, with Sberbank edging down 0.8% and Bank VTB advancing 0.3%. Norilsk Nickel stocks took a 1.2% drop under pressure from a local pullback in prices for the holding’s primary commodity groups. Steels experienced no major fluctuations, as Severstal closed flat, MMK inched up 0.2% and NLMK fell 0.2%.

US exchanges were again in bearish mode Monday, with the S&P 500 Index falling 1.2%, while financials and commodity issuers led the decliners. Concerns that stimulus measures are losing their effect put pressure on Asian equity markets as well, with the key benchmarks losing as much as 2%. A stronger dollar amid local softening of demand for risk exerted an adverse impact on commodity markets, as WTI futures dropped below USD 79 a barrel and primary groups of base metals also moved lower.

According to our outlook, Tuesday morning's news flow is unfavorable for the Russian stock market. Financials and metal issuers could come under the heaviest pressure. US CCI is due out in the second half of the session today and market players expect this indicator to rise to 53.5.

Daily Review. 26th October, 2009

2009-10-26T07:20:00.000+03:00

Domestic trading was quite low-key Friday on a stable external environment as the benchmarks posted moderate gains before the final bell, with the MICEX Index inching up 0.4% and the RTS Index advancing 0.9%.

O&G plays moved higher along with the market, as Lukoil edged up 0.2%, Gazprom grew 0.7%, Rosneft ended flat and Surgutneftegaz rose 0.4%. Banking names slightly underperformed, with Sberbank flat, Bank VTB dropping 0.3% and Bank Vozrozhdenie sinking 4.9%. Metals were mixed Friday, as Norilsk Nickel dipped 0.1%, Severstal and MMK jumped 0.8% and NLMK lost 0.6%.

Downbeat sentiment held sway on American exchanges Friday, with the S&P 500 Index tumbling 1.2%, while commodity issuers led the decliners. Asian trading is mixed this morning, with commodity plays standing out among the laggards. Commodity markets generally look favorable, with base and precious metal prices staying high. Only oil futures took a drop, falling below USD 80 a barrel.

According to our estimates, this morning the external news flow is unfavorable for the Russian stock market, but optimistic forecasts made by Russian state officials about prospects of the economic recovery could cheer investors. Norilsk Nickel and financial stocks could outperform today. With oil futures in retreat, O&G plays could underperform the market today.

Daily Review. 22nd October, 2009

2009-10-22T07:22:00.000+04:00

Domestic equities kicked off to the downside Wednesday, but the benchmark clawed back its losses and managed to head higher on the heels of strong earnings reports published by American corporations and an uptick in US indices, with the RTS Index inching up 0.03% and the MICEX Index advancing 0.84%.

O&G plays took a sharp leap heading into the final bell as oil prices rallied, with Gazprom adding 0.3%, Rosneft rising 1% and Lukoil edging up 0.2%. Sberbank stocks grew 2.2%, while Bank VTB eased 0.6% after the publication of ambiguous financials. Steels lagged behind the market, as MMK lost 1.6%, NLMK pulled back 2.8% and Severstal eased 0.9%.

US benchmarks opened higher yesterday after Yahoo released impressive financials, but before the final bell investors were disappointed by Boeing’s earnings report and analysts’ negative recommendations. For this reason, the benchmarks ended the day in the red. Asian indices are also heading south this morning. China’s GDP grew 8.9% in 3Q, meeting analysts’ expectations. Oil contracts spiked after the US petroleum inventory report came out. Brent is currently trading around USD 79.50 per barrel.

According to our estimates, Thursday morning's news flow is unfavorable for the Russian stock market. At the same time, a downtick in Asian benchmarks and US index futures will put pressure on the market. Meanwhile, higher crude prices could lend support both to the market as a whole and O&G plays in particular. A plunge in US financials could turn into an additional downside driver for domestic banking names. As for important economic data, we recommend investors to keep an eye on retail sales in the U.K., jobless claims in the US and the American Index of Leading Indicators.

Daily Review. 21st October, 2009

2009-10-21T09:47:00.001+04:00

Domestic equities kicked off to the upside Tuesday on the heels of bullish trends taking shape on global stock exchanges. However, in the second half of the session worse-than-expected economic data from the US dragged down the market and the benchmarks ended the session mixed, with the RTS Index advancing 0.89% and the MICEX Index slipping 0.26%.

O&G plays, except for Gazprom (up 0.3%), traded in negative territory as oil prices began to retreat near the final bell, as Rosneft dropped 1.4% and Lukoil dipped 1.5%. Domestic banking names moved lower along with the market, with Sberbank inching down 0.3% and Bank VTB falling 1.2%. Steel makers largely outperformed, as MMK was down 0.3%, NLMK advanced 0.9% and Severstal added 0.7%.

US trading was largely bearish Tuesday due to lower-than-expected new home starts in the country. The Dow Jones Industrial Average decreased 0.5%. Against this backdrop and with commodity markets experiencing a downturn Asian indices are also seeing losses this morning. Crude prices corrected down after more than a week of gains and on a stronger dollar. Brent contracts are currently trading around USD 76.80 per barrel.

According to our estimates, Wednesday morning's news flow looks unfavorable for the Russian stock market. We expect most liquid names to open lower. A retreat in crude futures is likely to put pressure on the market and O&G plays in particular. The release of 1H 2009 IFRS financials will be an important event for Bank VTB stocks. US oil inventories, due out at 6.30 pm Moscow time today, could impact oil market sentiment.

Daily Review. 20th October, 2009

2009-10-20T07:13:00.000+04:00

Domestic equity benchmarks moved higher amid rising oil prices and bullishness on Western markets, with the RTS Index advancing 1.75% and the MICEX Index surging 3.66%.

Rallying crude prices were the primary upside driver for O&G names, with Gazprom rising 2.3%, Rosneft leaping 2.9% and Lukoil gaining 1.8%. Banking names ended the session among the outperformers on a weakening dollar, as Sberbank climbed 6.5% and Bank VTB spiked 5.1%. Most steel issuers also enjoyed hefty demand, as MMK added 1.4%, NLMK climbed 5.1% and Severstal rose 4%.

US indices added an average 0.9% Monday on a string of robust corporate earnings reports. Asian markets are also on the rise, stoked by Apple’s stronger-than-expected sales and profit and the Reserve Bank of Australia intention to lift interest rates further once economic growth picks up. Weakness in the greenback had a positive impact on commodity markets, with Brent futures jumping to USD 78 a barrel.

We think Tuesday morning’s news flow is favorable for the Russian equity market and expect most liquid names to move higher at the open. O&G plays could lead the gainers on the back of rising oil contracts. The Bank of Russia is to hold a board meeting today that could consider another refinancing rate cut. A decision to lower the rate could exert a positive impact on the market as a whole. US new home starts, due out at 4.30 pm Moscow time, could also impact market sentiment today.

Daily Review. 19th October, 2009

2009-10-19T07:41:00.000+04:00

Domestic equities traded in negative territory on Friday as market players opted to take profit and Western exchanges turned bearish, with the RTS Index shedding 1.79% and the MICEX Index sliding 1.83%.

Despite higher oil prices, O&G plays followed the market, with Gazprom falling 2.3%, Rosneft dropping 1.3% and Lukoil edging down 0.8%. Domestic banking names underperformed, with Sberbank plunging 3.9% and Bank VTB skidding 5.1%. MMK stocks shot up 5.8% after the metal maker said it wrapped up the acquisition of a stake in coal miner Belon. However, metals saw no other gains, as NLMK eased 1% and Severstal gave up 2.6%. Inter UES soared 8.4% on news it could be assigned all genco stocks left after the wind-up of UES.

US benchmarks closed in negative territory Friday, with the S&P 500 Index dropping 0.8%. Most negativity came from earnings reports released by such major corporations as General Electric and Bank of America, leaving investors disappointed. The earnings reports that Asian concerns published today also did little to raise investors’ enthusiasm. As a result, Asian equities are also bearish this morning. After Russian exchanges closed crude oil futures rose 1% on a weakening dollar. Brent futures are currently trading around USD 77/bbl.

According to our estimates, Monday morning's news flow looks mostly unfavorable for the Russian stock market. Nonetheless, higher oil prices could lend support not only to O&G plays, but also the market as a whole. Norilsk Nickel’s 1H 2009 IFRS financial statement, due out today, could help impact market sentiment.

Daily Review. 16th October, 2009

2009-10-16T10:25:00.000+04:00

Russian benchmarks turned bearish Thursday, snapping several days of gains on weak Western earnings reports, with the RTS Index dropping 0.48% and the MICEX Index shedding 1.56%.
Most O&G plays moved higher on retreating oil prices, as Gazprom lost 2.2%, Rosneft inched up 0.3% and Lukoil eased 0.7%. Ambiguous financials released by major US banks exerted an adverse impact on domestic financial issuers, with Sberbank plunging 4.1% and Bank VTB sinking 3.9%. Steels, except for NLMK (a 3.9% surge), closed in stride with the market, with MMK falling 2.6% and Severstal dipping 0.9%.

American indices closed in positive territory Thursday, with the Dow Jones Industrial Average adding 0.5%. Rising oil prices were the primary upside driver, which, in turn, pushed up demand for energy stocks. Ambiguous earnings reports from Citigroup and Goldman Sachs left some investors disappointed, which capped upside in these stocks. Asian exchanges look bearish this morning. Financials are among the day’s standout decliners amid weak financials published by a number of American banks. After the release of a higher-than-expected drawdown in US oil inventories, oil prices soared to a new YTD high. Brent futures are currently trading around USD 76.50 a barrel.

We view Friday morning’s news flow as ambiguous for the Russian equity market. On the one hand, weaknesses in Asian benchmarks will put pressure on the market as a whole. On the other hand, a rebound in oil contracts will likely stoke demand for O&G plays. Banking names could lag slightly behind the market today on softer investor interest in financials. News that Inter UES could gain all genco stocks left after UES’ reorganization could spur a rally in this stock. US manufacturing numbers, due out today, are noteworthy.

Daily Review. 14th October, 2009

2009-10-14T07:09:00.000+04:00

The Russian stock market was hit with a correction on Tuesday after seeing several days of gains. A pullback on European exchanges put additional downward pressure on the domestic benchmarks, with the RTS Index retreating 1.96% and the MICEX Index sliding 2.71%.

O&G plays traded in negative territory Tuesday despite an uptick in crude futures, with Gazprom tumbling 1.3%, Rosneft plunging 5% and Lukoil shedding 3.6%. Steep losses were seen in banking names, outperformers of the previous sessions, as Sberbank sank 3.6% and Bank VTB declined 5%. Steels moved lower along with the market, as MMK declined 2.8%, NLMK gave up 2.5% and Severstal ended 0.2% lower. Wholesale genco stocks were back on track though, with OGK-2 leaping 5.6% and OGK-3 surging 6.3%.

US trading turned bearish Tuesday as Johnson & Johnson reported softer-thn-expected earnings and analysts downgraded recommendations on financials. Asian benchmarks are largely bullish this morning on data showing China's exports are falling at a slower pace and chipmaker Intel also cheered investors with its sales guidance. Oil contracts jumped on the optimistic outlook for global oil demand, with Brent contracts topping USD 73/bbl.

We view Wednesday morning’s news flow as favorable for the Russian equity market. With oil price in rally mode, O&G plays are likely to see robust demand at the open. In view of softening demand for global financial stocks, domestic banking names could slightly lag behind the market. Manufacturing numbers from the Eurozone and US retail sales data could impact trading sentiment today.

Daily Review. 13th October, 2009

2009-10-13T07:08:00.000+04:00

Russian equities moved steadily north Monday. The RTS Index gained 4.08% and the MICEX Index surged 3.77% on rising oil prices and a favorable environment on global commodity and stock markets.

O&G plays advanced on rallying oil futures, as Gazprom soared 6.2%, Rosneft jumped 2.5% and Lukoil added 2.6% to its market cap. Banking names posted gains along with the market, as Sberbank climbed 3.6% and Bank VTB bolted up 4%. Steel stocks again lagged behind the market, as MMK rose 1.4%, NLMK advanced 1.3% and Severstal grew 2.5%. Wholesale gencos stood out among the top outperformers, with OGK-5 spiking 30.6% and OGK-4 rallying 18.3%.

US markets, except for the NASDAQ, finished Monday in positive territory. The benchmarks moved higher on the heels of upside on commodity exchanges and also investors’ expectations about strong third-quarter earnings reports. Asian indices are also on the rise this morning on a weakening yen and upgraded recommendations by brokerages on steel and financial stocks. Brent crude moved marginally lower after Monday’s rally, and is currently trading around USD 71.20 a barrel.

We think Tuesday morning’s news flow looks moderately favorable for the Russian stock market. Gains in Asian equities and rising US index futures could lend support to the benchmarks. At the same time, a retreat in crude contracts could negatively impact O&G plays and the market as a whole. CPI data from the U.K. due out at 12.30 today is noteworthy.

Daily Review. 12th October, 2009

2009-10-12T07:20:00.000+04:00

Domestic equity benchmarks staged a show of strength again on Friday, setting more YTD highs on rising oil prices and robust performances on Western stock markets, with the RTS Index advancing 2.78% and the MICEX Index adding 2.32%.

Rallying crude prices acted as the key upside driver for O&G names, with Gazprom gaining 1.6%, Rosneft surging 4.5% and Lukoil soaring 6.2%. Banking names also saw robust demand, as Sberbank advanced 3.2% and Bank VTB shot up 6%. Unexpectedly, steel issuers underperformed, with MMK slipping 2.2%, NLMK shedding 2.3% and Severstal edging down 0.1%.

US trading floors closed the week in positive territory, as the Dow added 0.8%. Optimism came from macroeconomic data and Alcoa’s strong earnings report. Asian equities look mixed this morning, with negative forecasts for the financial performance of the region’s corporations putting pressure on the market. Japanese stocks are closed for a holiday today. Oil contracts won back Friday’s downturn on the back of a weakening dollar. At present, Brent contracts are trading around USD 70.50 per barrel.

According to our estimates, Monday morning's news flow is moderately favorable for the Russian stock market. Higher oil prices will likely lend support to O&G plays. No market drivers are expected to be released today, so investors are advised to focus on domestic fundamentals.

Daily Review. 9th October, 2009

2009-10-09T09:44:00.001+04:00

Russian equities surged to YTD highs on Thursday on the back of global optimism, with the RTS Index climbing 3.7% and the MICEX Index advancing 4.3%.

Amid a firming ruble the day’s top gainers were banking stocks, as Sberbank rallied 6.4% and Bank VTB soared 7.2%. O&G plays traded up with the market, as Gazprom rose 2.7%, Lukoil surged 5.2%, Rosneft climbed 4.9% and Surgutneftegaz ended 3.3% higher. Steels lagged behind the market, with Severstal adding 1.5%, NLMK rising 1.1% and MMK advancing 0.9%.

A rally on international stock exchanges continued Thursday after the release of better-than-expected initial job data from the US and upbeat statements by ECB officials who pointed to positive trends in the economy, saying they are prepared to keep interest rates low. The S&P 500 Index added 0.8%, with O&G plays outperforming. Asian trading is also bullish this morning, with some benchmarks rising as much as 4%. Commodity exchanges saw more upside on expectations the dollar would weaken, as WTI contracts closed in on USD 72 a barrel and base metals stood out among the top gainers.

We think Friday morning’s news flow is favorable for the Russian equity market. The trading session is likely to open with an uptick and provided that the news flow remains favorable we expect O&G plays, which have lagged behind the market since the beginning of the week, could emerge among the frontrunners.

Daily Review. 8th October, 2009

2009-10-08T07:22:00.001+04:00

Domestic equities landed in positive territory Wednesday despite bearish trends on European stock exchanges, with the RTS Index adding 1.3% and the MICEX Index advancing 0.5%.

O&G plays, except for Gazprom (off 0.5%), moved higher along with the market, with Rosneft adding 0.5%, Lukoil rising 1.2% and Surgutneftegaz jumping 1.7%. Sberbank (up 2%) outperformed, while Bank VTB (flat) took a breather after a rally in the past few sessions. Steel stocks slightly underperformed, as MMK slipped 1.6%, NLMK pulled back 2.4% and Severstal eased 0.6%.

US equities looked mixed Wednesday, ending without any noticeable moves. Financial issuers came out on top. Strong economic data from Australia inspired investors on Asian markets that are seeing gains at the moment, with commodity sectors leading the advancers. Commodity markets continue to climb on concerns about further weakening of the dollar, with WTI futures trading above USD 70/bbl and gold contracts topping $1,050.

We believe Thursday morning's news flow is favorable for the market and we expect liquid names to kick off to the upside at the open. Norilsk Nickel and coal miners look set to outperform today. A favorable external news flow is likely to shore up banking stocks. Today, the ECB and the Bank of England are to announce rate decisions, which will likely remain unchanged, and market players will keep an eye on comments on the current state of the global economy.

Daily Review. 7th October, 2009

2009-10-07T07:08:00.000+04:00

Domestic equities rose amid global optimism after the Reserve Bank of Australia raised its target cash rate, with the MICEX Index surging 3.6% and the RTS Index adding 3.5%.

O&G and steel issuers traded up with the market, as Gazprom grew 2.7%, Lukoil jumped 3.7%, Rosneft climbed 5%, MMK spiked 4.4%, NLMK advanced 3.6% and Severstal moved 2.2% higher. A stronger ruble led banking stocks higher, with Sberbank surging 4.3% and Bank VTB rallying 7.9%. Norilsk Nickel stocks climbed 3.5% on a spike in the holding’s primary commodity groups.

American benchmarks moved further north on expectations the global economic climate is improving. The Reserve Bank of Australia's rate hike decision instilled optimism in market players. The S&P 500 Index gained 1.4%, with commodity issuers leading the advancers. Asia market are seeing robust gainsg this morning, with financial and manufacturing stocks outperforming. Commodity markets posted gains on a weakening dollar and optimism about stabilization in the international economic environment, as WTI futures closed in on USD 72 a barrel, and all base and precious metals saw gained.

According to our estimates, the Russian stock market priced in a substantial portion of global optimism Tuesday and today the uptrend is likely to continue at a slower pace. Banking and Norilsk Nickel stocks could outperform today. Gold-mining stocks will likely enjoy robust demand today.

Daily Review. 5th October, 2009

2009-10-05T07:21:00.000+04:00

On Friday, domestic equities managed to fend off external negativity, but finally gave in under pressure from surprisingly weaker-than-expected unemployment data from the US, as the RTS Index plunged 3.3% and the MICEX Index sank 2.9%.

O&G plays traded down in synch with the market, as Gazprom plummeted 2.8%, Lukoil fell 2.9% and Rosneft gave up 3%. Banking plays outperformed, with Sberbank losing 2.3% and Bank Vozrozhdenie easing 0.4%, while Bank VTB even managed to add 0.9%. Friday’s standout losers were metal issuers, with Norilsk Nickel diving 5.3%, MMK sinking 4.4%, NLMK ending 2.3% lower and Severstal declining 5.5%.

US equities traded in negative territory on Friday. After the release of unexpectedly poor jobs data, the S&P 500 Index retreated 0.5%, with manufacturing issuers leading the decliners. Asian markets are moderately bearish this morning on fears the global economy will be slow to recover, with the key benchmarks losing around 1.5%. Commodity markets look stable despite a pullback in stocks across the globe, as oil contracts are trading around USD 68-70 a barrel and gold futures are hovering just above USD 1,000/oz.

According to our estimates, the market priced in most of the external negativity on Friday and we view Monday’s news flow as neutral. Provided that the external environment stabilizes, during the session investors could make an attempt to win back some of Friday’s losses. Metals and banking names could outperform if upbeat trends gain momentum.

Daily Review. 2nd October, 2009

2009-10-02T10:16:00.000+04:00

Domestic equities posted gains Thursday, shrugging off a downturn on global stock exchanges, as the MICEX Index advanced 1.2% and the RTS Index rose 1%.

Thursday’s unrivalled advancers were steels on the heels of good corporate news, with MMK soaring 7.7%, NLMK surging 5% and Severstal adding 2.7%. Banking and O&G plays moved higher along with the market, as Gazprom rose 0.6%, Lukoil jumped 2.2%, Rosneft inched up 0.1%, Sberbank was up 0.2% and Bank VTB landed 1.4% in the black. Telecoms underperformed, with MTS losing 0.5% and Rostelecom giving up 2.1%.

Bearish sentiments prevailed in US trading Thursday following the release of weak unemployment and manufacturing numbers. The S&P 500 Index sank 2.5%, while financials and commodity issues underperformed. Asian trading floors are lower this morning on growing investor concerns the pace of global recovery would slow down, with the benchmarks losing around 2.5%. Commodity markets look stable, with crude futures still trading in the range of USD 68-70 and base metals marginally lower.

According to our estimates, Friday morning's news flow is unfavorable for the Russian stock market. Financial and metals stocks will likely top the list of decliners today. Stable oil prices could lend support to O&G plays. US jobless numbers are due out during the second half of the session and investors expect unemployment to climb to 9.8%, the highest since 1983.

Daily Review. 1st October, 2009

2009-10-01T07:13:00.000+04:00

Domestic trading was low-key for the most session, but a pullback on the US market at the open triggered a wave of sell-offs in Russian stocks, as the RTS Index dropped 0.5% and the MICEX Index gave up 1.3%.

Despite rising oil futures, O&G plays moved lower along with the market, as Gazprom lost 2.5%, Lukoil dipped 1.2%, Rosneft tumbled 0.8% and Surgutneftegaz fell 1.3%. Banking names, in spite of upbeat statements by CBR officials, underperformed, with Sberbank retreating 1.3% and Bank VTB sinking 3%. Norilsk Nickel stocks declined 0.9%, shrugging off growing prices for the holding’s primary commodity groups. Steel-making issuers slightly outperformed, as MMK added 2.2%, NLMK advanced 1.6% and Severstal ended flat.

Although US GDP data came in better than expected, American benchmarks landed in the red Wednesday. The S&P 500 Index dropped 0.3% and commodities led the losers. Investors were disappointed by Alan Greenspan’s expectations of an economic slowdown in the country next year. Asian trading floors are mixed this morning, with Chinese issuers seeing gains. Last night commodity markets moved firmly north, with oil futures rebounding to USD 68-70 a barrel and gains seen in all primary groups of base metals.

Given the upside on commodity markets since Wednesday night, we think Thursday morning's news flow is favorable for domestic stocks. O&G plays and Norilsk Nickel stocks could outperform today. Also coal miners are most likely to remain among the frontrunners. A string of economic data, including jobless claims, is due out in the second half of the session today, which could impact market trends.

Daily Review. 30th September, 2009

2009-09-30T08:15:00.001+04:00

A favorable external news flow allowed domestic stocks to end the session higher, as the RTS Index advanced 1% and the MICEX Index edged up 0.4% on Tuesday.

O&G plays showed mixed performances, with Gazprom tumbling 0.6%, Lukoil rising 1.6% and Rosneft losing 1.7%. Banking names headed further north in stride with the market, as Sberbank rose 0.7% and Bank VTB ended 1.1% higher. In the steel sector, stocks of vertically integrated concerns outperformed, with Severstal gaining 1.1%, NLMK advancing 0.7% and MMK shedding 1.5%. Mechel emerged as the day's top gainer on the heels of a favorable climate on the domestic metals market.

US benchmarks moved lower Tuesday after racking up sizeable gains the day before, with the S&P 500 Index falling 0.2%, while O&G and financial names led the decliners. Asian trading floors look mixed this morning, with Chinese stocks posting gains, and commodity names standing out among the advancers. Commodity markets continued their gradual ascent Tuesday, as oil contracts are trading within a narrow band of USD 66-67 a barrel and gold futures closed in on USD 1,000/oz.

Wednesday morning's news flow is neutral for the Russian market. According to our estimates, shares of vertically integrated concerns and metal raw material producers (Severstal and Raspadskaya) could outperform. A big batch of US economic data which could impact trading is due out in the second half of the day.

Daily Review. 29th September, 2009

2009-09-29T07:28:00.000+04:00

Domestic blue chips kicked off to the downside at the open Monday, but the improving global environment pushed the benchmarks into positive territory, as the RTS Index advanced 1.9% and the MICEX Index added 1.7%.

With oil contracts rising, O&G plays outperformed, with Gazprom advancing 1.6%, Lukoil jumping 1.9%, Rosneft rallying 3.8% and Surgutneftegaz surging 4.8%. Metal issues continued to lag behind the market, as Norilsk Nickel edged up 0.9%, MMK lost 0.9%, NLMK inched up 0.1% and Severstal ended just 0.2% higher. In the banking sector, Bank VTB topped the list of advancers, soaring 4.1%.

US equities were back in bullish mode Monday, with the benchmarks adding up to 2%, with financials and commodities leading the market higher. Asian trading floors also look strong this morning, as investors read a 2-week low as a good chance to buy into stocks. Commodity exchanges experienced a correction, regaining positions after a slump at the end of last week, with crude oil futures rebounding to USD 65-67 a barrel and base metals also on the rise.

Tuesday morning's news flow will likely see the rally continue on the Russian equity market. Among the potential gainers we’d like to highlight financials and coal names. The US CCI is due out during the second half of today’s session and market players expect this indicator to improve to 57.

Daily Review. 28th September, 2009

2009-09-28T07:14:00.000+04:00

Domestic trading was marked by higher volatility Friday, while the benchmarks ended mix, with the RTS Index slipping 1.4% and the MICEX Index edging up 0.9%.

After the release of Raspadskaya’s interim financials coal stocks led the gainers, with Raspadskaya shooting up 9.6% and Belon surging 7.5%. O&G plays moved higher along with the market, as Gazprom inched up 0.4%, Lukoil jumped 1.5% and Rosneft rose 0.8%. Hefty gains, despite a correction in primary commodity groups, were seen in Norilsk Nickel, up 3.2%. Banking names looked mixed, with Sberbank adding 2.4% and Bank VTB inching up 0.2%. Steels underperformed, with MMK falling 0.4%, NLMK advancing 0.4% and Severstal closing 0.8% lower.

US benchmarks finished the week in negative territory, with the S&P 500 Index dropping 0.6%, and financials and commodity names leading the decliners. Asian indices are also heading south this morning on worries about the ability of the US economy to recover rapidly, with major indexes losing up to 2.5%. Commodity markets continued a falling trend, with oil contracts sinking to USD 64-65 a barrel and primary groups of non-ferrous metals also in decline.

The stage is set for a correction on the Russian market this morning and we expect blue chips to kick off to the downside at the open. Banking and O&G names could come under the heaviest pressure today. Metal plays buoyed by a favorable sector climate and strong financials could outperform.

Daily Review. 25th September, 2009

2009-09-25T07:13:00.000+04:00

The publication of worse-than-expected US second-home sales data Thursday dragged down domestic benchmarks, with the RTS Index dropping 0.96% and the MICEX Index tumbling 1.80%.

O&G names moved lower on falling crude prices, as Gazprom gave up 1.7%, Rosneft pulled back 2.3% and Lukoil sank 2.1%. Banking names topped the list of losers, with Sberbank plunging 3.6% and Bank VTB plummeting 4.2%. Quite unexpectedly, steel-making issuers slightly outperformed, as MMK edged up 0.4%, NLMK added 0.8% and Severstal gained 1.2%.

Downbeat sentiments prevailed on the American stock market Thursday because of weak secondary home sales in the country. Tumbling oil put additional pressure on the indices. Against this backdrop, Asian trading floors are also in bearish mode. Financials are among the lead decliners after reports Nomura Holdings intends to bump up its capital via SPO. Weak economic data from the US also had an impact on the petroleum market, with Brent futures dropping to USD 65.50 a barrel.

We think Friday morning’s news flow is neutral for the Russian equity market. An uptick in US index futures could lend support to the Russian benchmarks. Yesterday O&G plays managed to win back losses caused by a sharp decline in oil contracts, so today they could take a jump on a rebound in crude futures. Softening demand for global financials could take a toll on domestic banking names. As for market drivers, we recommend investors to keep an eye on US new home sales.

Daily Review. 24th September, 2009

2009-09-24T10:02:00.000+04:00

Domestic equities headed north in the first half of Wednesday, but came under pressure from a slide in crude futures near the final bell. As a result, the RTS Index managed to hold ground, edging up 0.41%, while the MICEX Index eased 0.34%.

O&G plays experienced sell-offs near the closing bell after a slump in oil prices, with Gazprom losing 1.8%, Rosneft ending flat and Lukoil tumbling 2.5%. In the banking sector, Sberbank again enjoyed the heftiest demand, leaping 3%, while Bank VTB, on the contrary, gave up 1.7%. Steels closed mixed, as MMK added 2.4%, NLMK eased 0.3% and Severstal fell 0.4%.

American benchmarks closed in negative territory Wednesday, with the S&P 500 Index dropping 1%. Investors were slightly disappointed by the Fed's comments which could imply the regulator’s aspiration to contract efforts aimed at stimulating the American economy. Asian exchanges are also bearish this morning, with commodity stocks leading the pack amid weak performances of commodity exchanges. Oil contracts declined after the publication of solid builds in US petroleum inventories. Currently, Brent contracts are trading at USD 67.50 per barrel.

According to our estimates, Thursday morning's news flow is unfavorable for the Russian stock market. Commodity stocks are likely to slightly underperform today. This primarily concerns O&G blue chips that will remain under pressure from falling oil futures. As for market drivers, we recommend investors to keep an eye on US jobless claims and housing data.

Daily Review. 23rd September, 2009

2009-09-23T07:05:00.000+04:00

Domestic equities headed firmly north Tuesday on the heels of global stock and commodity markets, with the RTS Index jumping 3.19% and the MICEX Index leaping 3.25%.

O&G plays enjoyed hefty demand on rising oil prices, as Gazprom added 4.2%, Rosneft advanced 1.4% and Lukoil grew 2.2%. Banking names outperformed on a weakening dollar, with Sberbank rallying 5.9% and Bank VTB climbing 4.7%. Steel issuers slightly lagged behind key stock indices, as MMK edged up 0.6%, NLMK rose 0.8% and Severstal closed 1.8% higher.

American trading floors were again in bullish mode Tuesday, with the Dow going up 0.5%. Specifically, this uptrend was stoked by upside on commodity markets and also investors’ more upbeat expectations about the financial performance of a number of American corporations. Asian trading looks mixed at the moment. Big demand is seen in energy stocks on the back of rising crude futures. The dollar’s weakening produced a positive impact on both the metals and crude markets. Brent contracts are trading above USD 70 per barrel.

We believes Wednesday morning's news flow is again largely favorable for the Russian stock market. Commodity stocks have a chance to outperform today on the upside on commodity exchanges. The US mid-week petroleum inventory report, due out today, could influence trading patterns on the oil market. Also, the Fed is to announce its rate decision today after Russian exchanges are closed for the night. Market players expect the US federal funds rate to remain unchanged.

Daily Review. 22nd September, 2009

2009-09-22T07:19:00.000+04:00

Domestic equity benchmarks finished in negative territory Monday amid weak performances of global stock exchanges and a retreat in crude futures, with the RTS Index tumbling 2.8% and the MICEX Index sinking 3.58%.

Falling crude contracts put pressure on O&G plays, as Gazprom gave up 3.6%, Rosneft declined 1.8% and Lukoil plunged 3.5%. Banking names moved south along with the market, as Sberbank plummeted 3.9% and Bank VTB dove 3.3%. Steels followed suit, as MMK pulled back 2.6%, NLMK lost 3.2% and Severstal ended 2.5% lower.

US exchanges turned bearish Monday largely due to corrective trends, with the S&P 500 Index edging down 0.3%. Most Asian benchmarks are heading north this morning on the heels of positive corporate news. After a steep decline oil futures slightly rebounded to USD 68.80/bbl.

We think Tuesday morning’s news flow is moderately favorable for the Russian equity market. We expect most liquid names to kick off to the upside at the open. Today Federal Grid Company (FGC) plans to approve the cap for electric power and heat tariffs, and decisions adopted could impact the performance of utility stocks.

Daily Review. 21st September, 2009

2009-09-21T07:09:00.000+04:00

Domestic equities closed higher Friday on strong performances of global exchanges and some support from statements made by Russian Prime Minister Vladimir Putin at the International Investment Forum in Sochi about the state and prospects of the Russian economy, with the RTS Index advancing 1.15% and the MICEX Index edging up 0.27%.

O&G plays ended the trading week in positive territory on rising oil prices, with Gazprom adding 0.5%, Rosneft inching up 0.1% and Lukoil ending 1% higher. In the banking sector, Bank VTB enjoyed hefty demand, leaping 5.6%, while Sberbank lost 2.2%. Steels, except for MMK (off 0.4%), outperformed, as NLMK rallied 3.8% and Severstal climbed 4.2%.

American benchmarks finished in the black Friday after large investment banks upgraded their recommendations on some blue chips. Asian markets are moving lower this morning, correcting down after a previous uptick. Japanese and Indian exchanges are closed for public holidays. Crude prices are trading slightly above USD 71 a barrel, but are largely on the decline.

According to our estimates, Monday morning's news flow is largely unfavorable for the Russian stock market. O&G plays could underperform today if oil contracts keep falling. Important economic data (the US Index of Leading Indicators) are due out only at 6 pm Moscow time.

Daily Review. 18th September, 2009

2009-09-18T07:34:00.000+04:00

Domestic equities moved lower Thursday in spite of upside on commodity markets and European trading floors, as the RTS Index gave up 1.2% and the MICEX Index tumbled 1%.

Norilsk Nickel stood out among blue chips, rallying 4.3% on the heels of rising prices for the holding’s primary commodities. O&G plays looked mixed on stabilizing crude prices, with Gazprom edging down 0.3%, Lukoil easing 2.1% and Rosneft advancing 0.8%. Steel-making issuers posted losses in line with the market, as MMK inched down 1%, NLMK lost 0.3% and Severstal fell 1%. Stocks of state-controlled lenders were the day’s standout losers, as Sberbank plunged 4.5% and Bank VTB plummeted 2.9%.

US exchanges corrected down Thursday after an uptrend earlier in the week, with the S&P 500 Index dropping 0.3%, while commodities and energy stocks led the decliners. Asian issuers are heading south this morning, down around 1.5%, and commodity stocks are topping the list of losers. Commodity markets saw no tangible fluctuations, with oil futures trading around USD 71-72 per barrel and non-ferrous metal contracts taking a drop after gains reaped up Wednesday.

According to our estimates, Friday morning's news flow is unfavorable for the Russian equity market and we expect stocks to head further southward at the open. If corrective trends gain momentum, state-run banking stocks could underperform. The favorable news flow in the coal sector could shore up coal issuers.

Daily Review. 17th September, 2009

2009-09-17T07:12:00.000+04:00

Russian equities moved further north Wednesday on the heels of global bullish trends, with the MICEX Index rising 1.1% and the RTS Index adding 1.8%.

In the blue-chip section Bank VTB emerged as the day’s unrivaled leader, rallying 13% apparently on a speculative narrowing of its positions against Sberbank, up 0.7%. Only Gazprom stood out among O&G plays, adding 3.1%, while other oil names saw fractional price moves, with Lukoil edging down 0.1% and Rosneft ending flat. Metal names, except for MMK (off 2%), largely followed the market, as Norilsk Nickel rose 0.9%, NLMK inched up 0.4% and Severstal climbed 1.9%.

US indices headed further north Wednesday on the back of growing industrial output and upbeat investor expectations about recovery prospects of the global economy. The S&P 500 Index jumped 1.6%, with O&G and financial stories outperforming. Asian stocks gained around 2% this morning, with oil and gas names leading the gainers. Continuing weakening of the dollar coupled with new signs of the economic recovery is dragging up commodity markets, as oil futures jumped to USD 72/bbl and gold contracts held ground above the USD 1,000/oz mark.

Thursday morning's news flow again creates all conditions for upside on the Russian stock market. Among potential top picks of the upcoming trading session we’d like to highlight banking and O&G plays. A continuing contraction in Chinese steel prices and risks associated with growing supply on external markets on the part of Chinese manufacturers could put some pressure on ferrous metals stocks. US housing and unemployment data are due out in the second half of the session today, which could impact trading patterns.

Daily Review. 16th September, 2009

2009-09-16T07:14:00.000+04:00

Taking advantage of external bullish trends domestic benchmarks added 2.5% Tuesday, hitting new highs from the beginning of the year.

Financials stood out among blue-chip stocks as the day’s top gainers, with Sberbank leaping 4.1% and Bank VTB climbing 5.6%. As for O&G plays, Rosneft reaped up sizeable gains, up 5.4%, while other issuers followed the market, as Gazprom and Lukoil advanced 2.5%, Surgutneftegaz added 3.1% to its market cap. Also metals traded in stride with the market, as Norilsk Nickel jumped 3.7%, MMK edged up 0.2%, NLMK climbed 2.8% and Severstal ended 1.5% higher.

US indices moved further north on upbeat economic data and the Fed chairman’s statements about the end of technical recession in the US. The S&P 500 Index edged up 0.5%, while commodities turned into the unrivalled gainers. Upbeat sentiment also spilled over to Asian trading floors, up 1.5-3% this morning, with commodities and financials leading the pack. A continuing weakening of the greenback and strong economic data from the US sparked an uptick on commodity markets, as oil contracts jumped to USD 70/bbl and all non-ferrous metals gained no less than 2%.

We believe Wednesday morning's news flow is conducive to further upside on the Russian equity market. Among today’s top picks we’d like to highlight metals and banking stocks. US economic data will be a determining factor for the market for a second consecutive session. More precise, investors expect US August CPI and manufacturing numbers, as well as 2Q 2009 trade balance, to be made public in the second half of the session.

Daily Review. 15th September, 2009

2009-09-15T07:15:00.000+04:00

Shortly after the opening bell Russian equities gave up around 2% Monday, but the favorable news flow from external markets allowed issuers to minimize losses, with the MICEX Index ending flat and the RTS Index inching down 0.2%.

RusHydro (up 3.9%) emerged as the day’s standout gainer despite statements by authorities the amount of accident-related damages could be revised. O&G plays, except for Surgutneftegaz (+2.3%), slightly underperformed the market, as Gazprom tumbled 0.9%, Lukoil dropped 0.8% and Rosneft closed flat. Financials saw no tangible changes, as Sberbank dipped 0.5% and Bank VTB finished flat. Metals finished the session in negative territory, with Norilsk Nickel losing 0.3%, MMK falling 1.1%, NLMK easing 0.3% and Severstal ending 1% lower.

US exchanges saw moderate upside Monday, with the S&P 500 Index adding around 0.5% and commodity stocks topping the list of gainers. Asian trading is bullish this morning, with commodity plays leading the advancers. A softening dollar sparked upside on commodity exchanges, as oil futures rebounded to above USD 68 and industrial non-ferrous metals posted gains.

We believe Tuesday morning's news flow is favorable for the Russian market and metal and banking stocks could be potential advancers if bullish trends unfold. US PPI and retail sales data, due out in the second half of the session, will be a determining factor for the market.

Daily Review. 14th September, 2009

2009-09-14T11:50:00.001+04:00

Russian trading floors moved further north Friday, taking full advantage of investors’ growing risk appetite, as the RTS Index advanced 2.8% and the MICEX Index edged up 1.8%.

Friday’s lead gainers were steels that lagged slightly behind the market during the week, with MMK leaping 6.4%, NLMK rallying 5.8% and Severstal gaining 4.6%. Domestic banking names also outperformed, with Sberbank leaping 4.8% and Bank VTB climbing 3.5%. Despite a pullback in the holding’s primary commodity prices, Norilsk Nickel stocks grew in stride with the market. O&G names slightly underperformed the market, as Gazprom edged up 0.7%, Lukoil ended 0.4% higher and Rosneft added 1.6%.

US trading was moderately downbeat Friday. The S&P 500 Index inched down 0.1%, with financials underperforming. Asian exchanges are heading firmly south on worries the market overestimates recovery prospects of the economy. Regional benchmarks are down an average 1.5%, with commodities leading the decliners. Commodity markets look bearish, as oil futures decreased to USD 67-68 a barrel and industrial non-ferrous metals also took a drop.

In our view, Monday morning's news flow lays groundwork for a correction on the Russian equity market. Commodity stocks will likely come under the heaviest pressure. If bearish trends gain momentum intraday, steep losses could be seen in financials that outperformed last week.

Daily Review. 11th September, 2009

2009-09-11T07:09:00.000+04:00

Russian benchmarks delivered mixed performances Thursday amid volatile crude prices and a softening dollar, with the RTS Index inching up 0.34% and the MICEX Index easing 0.5%.

O&G plays, except for Gazprom (up 1.4%), failed to ride a wave of upside in crude prices that hit heading into the final bell, as Rosneft lost 1% and Lukoil ended flat. Banking names again underperformed, with Sberbank retreating 1.5% and Bank VTB dropping 1.7%. Steels closed mixed, as MMK added 1.5%, NLMK slid 2.3% and Severstal fell 1.3%.

The bulls prevailed on the American stock market Thursday. The S&P 500 Index added 1% after the publication of lower-than-expected jobless claims. Rallying oil contracts turned into another driver for energy plays. Asian indices are mostly higher this morning, with China’s strong industrial output data acting as a key driver. The oil market is also on the rise as IEA again revised upward its forecast for crude demand in 2009-2010 and also in view of a contraction in US petroleum inventories.

We view Friday morning’s news flow as favorable for the Russian equity market. We expect most liquid names to kick off to the upside at the open. O&G plays could enjoy hefty demand on the back of rising oil prices. China’s growing industrial output will push up metal prices which, in turn, could lend support to domestic metal issuers.

Daily Review. 10th September, 2009

2009-09-10T07:42:00.000+04:00

The Russian stock market extended its gains Wednesday on rallying oil prices, a weakening dollar and upside on global stock exchanges, with the RTS Index adding 2.1% and the MICEX Index edging up 0.88%.

O&G names moved higher following an uptick in oil futures, as Gazprom added 2.6%, Rosneft grew 0.7% and Lukoil surged 5.2%. Banking names corrected down after a big rally, with Sberbank losing 1.8% and Bank VTB sliding 2.6%. Steels ended mixed, as MMK dipped 1%, NLMK advanced 0.6% and Severstal inched down 0.1%.

On Wednesday US benchmarks closed with modest gains averaging 1%. The Fed's comments about signs of recovery seen in the banking sector acted as an upside driver. Asian exchanges are mostly bullish this morning on the publication of strong corporate earnings reports. After a pullback oil contracts headed further north, with Brent futures topping the USD 71/bbl mark.

We believe Thursday morning's news flow is favorable for the Russian equity market. A rebound in oil prices will likely contribute to upside in O&G plays. Demand for Sberbank stocks will be defined by the lender’s 1H 2009 IFRS financials due out today. As for market drivers, we advise focusing on US unemployment data and the mid-week petroleum inventory report. The Bank of England is also set to unveil its rate decision and the market expects the rate to remain unchanged.

Daily Review. 8th September, 2009

2009-09-08T07:29:00.000+04:00

Domestic stocks moved higher Monday on the heels of upside in European benchmarks and crude futures, with the RTS Index advancing 2.77% and the MICEX Index adding 2.43%.

O&G names posted advances following an uptick in oil futures, as Gazprom added 2.8%, Rosneft grew 2.6% and Lukoil rose 1.1%. Bank VTB rallied by 9.4% on information about the lender’s SPO results. Sberbank stocks also enjoyed hefty demand, up 4.1%. Steels posted advances in stride with the market, with MMK leaping 2.9%, NLMK and Severstal advancing 2.8%.

US trading floors were closed for Labor Day holiday on Monday. Asian markets are largely bullish this morning, to a certain extent, on the publication of Australia’s Consumer Confidence Index that hit a 6–year record high. Crude contracts corrected up after Monday’s pullback. Brent contracts are currently trading at USD 67.00 per barrel.

We think Tuesday morning’s news flow is ambiguous for the Russian equity market. A retreat in oil futures will likely put pressure on O&G plays. Rising demand for global financial stocks could shore up domestic banking stocks. As for market drivers, manufacturing data from Germany and the UK, due out today, could impact investor sentiment.

Daily Review. 7th September, 2009

2009-09-07T07:37:00.001+04:00

Russian equities kicked off to the upside Friday, but in the second half of the session domestic indices turned south amid falling oil futures, landing in the red, as the RTS Index dropped 0.98% and the MICEX Index eased 0.74%.

With oil contracts in retreat, O&G names underperformed, as Gazprom dipped 0.6%, Rosneft declined 1.2% and Lukoil sank 2.8%. Domestic banking names looked mixed, with Sberbank inching up 0.3% and Bank VTB sliding 2.8%. Steel stocks moved lower along with the market, as MMK declined 2.4%, NLMK gave up 0.6% and Severstal ended 0.1% lower.

US stock benchmarks ended in positive territory Friday, adding an average 1%. Investor optimism stemmed from the publication of US labor data that turned out to be better than expected. Asian exchanges are also bullish this morning taking into account optimistic statements made by central bank executives at the G20 summit in London about the state of the global economy and measures taken to overcome the crisis. Crude futures were flat, with Brent trading slightly above USD 67/bbl.

We think Monday morning’s news flow is moderately favorable for the Russian equity market. If oil prices keep rising, this will push up demand for O&G names. Today Severstal is set to release its 1H 2009 IFRS financial statement which could impact the metal maker’s stock performance. The US stock market is closed for the Labor Day holiday today, so market players are likely to take a closer look at domestic factors.

Daily Review. 4th September, 2009

2009-09-04T07:26:00.000+04:00

Domestic equities turned in positive performances Thursday primarily on the back of solid gains in certain names (Sberbank and Polyus Gold), with the MICEX Index advancing 1.6% and the RTS Index adding 2%.

Polyus Gold (up 8.2%) was the day’s standout gainer as gold contracts closed in on the USD 1,000/oz mark. Sberbank spiked 8% without any fundamental reasons. O&G plays looked mixed on stable crude prices, with Lukoil edging down 0.4%, Gazprom easing 0.5% and Rosneft rising 1.5%. Metals lagged behind the market, as Norilsk Nickel advanced 0.4%, MMK grew 0.5%, NLMK eased 0.8% and Severstal declined 1.4%.

Bullish trends prevailed on US exchanges Thursday, with benchmarks adding around 1%, and commodity and financial stocks leading the advancers. Asian exchanges are looking mixed this morning on worries regional economic growth could decelerate. Commodities saw no tangible changes, with oil futures still trading around USD 67-68 per barrel and gold contracts approaching USD 1,000/oz mark for the first time in six months.

We believe Friday morning's news flow is moderately upbeat for the Russian market and more upside can be expected at the open. Precious metal and banking names will likely continue to lead the outperformers. Steels will probably see little demand, with Mechel possibly being an exception. Today investors will keep an eye on US labor market data and the market expects unemployment to reach 9.5%.

Daily Review. 3rd September, 2009

2009-09-03T07:25:00.000+04:00

Domestic benchmarks moved lower under the influence of external negativity. As a result, the MICEX Index pulled back 2.6% and the RTS Index slid 1.9%.

Shrugging off the market environment, regional telecom prefs continued to power ahead, as Uralsvyazinform climbed 5.2%, Volgatelecom advanced 4.5% and Sibirtelecom spiked 8%. O&G plays traded in stride with the market, with Lukoil losing 2.1%, Gazprom pulling back 2.7% and Rosneft declining 1.9%. Banking issuers also moved lower in stride with the market, as Sberbank dropped 0.5%, Bank VTB sank 3% and Bank Vozrozhdenie eased 0.6%. Wednesday’s unrivaled losers were steels, with Severstal plunging 7.7%, NLMK plummeting 8.8% and MMK falling 2.9%.

US trading was quite low-key Wednesday, with financials slightly underperforming and the key benchmarks seeing marginal losses. Asian trading floors are looking mixed this morning as commodity issues move higher. Commodity markets looked stable, with oil futures trading around USD 67-68, and only gold contracts took a sharp leap, hitting USD 975/oz.

According to our estimates, Thursday morning's news flow is neutral for the Russian equity market, but we do not rule out seeing investors attempt to win back some turf lost Wednesday. State-owned banking stocks and equity plays geared towards domestic demand could slightly outperform. O&G plays are likely to come under pressure. All eyes will be on US unemployment figures due out in the second half of the session. ECB is also expected to decide on interest rates today and the market expects the bank to hold rates steady at 1%.

Daily Review. 2nd September, 2009

2009-09-02T07:12:00.001+04:00

Russian equities traded close to Monday’s closing price levels for most of Tuesday’s session, but positive macroeconomic data out of the US cheered investors heading into the final bell, with the MICEX Index edging up 1.2% and the RTS Index advancing 0.7%.

Regional telecoms emerged as the standout gainers for the second session in a row on expectations the telecom industry is on the verge of reforms, with big demand primarily seen in preferred shares, as Uralsvyazinform prefs shot up 14.2%, Siberia Telecom prefs surged 13.5% and Volgatelecom prefs climbed 9%. Sberbank also locked in solid gains, rising 4% on the back of an abrupt wave of optimism triggered by some investment companies about prospects of the banking sector. O&G plays moved higher along with the market, with Lukoil adding 1.2%, Gazprom inching up 0.4% and Rosneft closing 1.4% higher. Steel makers underperformed, as Severstal dropped 0.4%, NLMK sank 3.1% and MMK grew 1.1%.

The S&P 500 Index skidded more than 2% Tuesday, with the top decliners led by financials (down about 5%) on fears the quality of credit portfolios would continue to worsen. Bearish trends predominate on Asian exchanges this morning, with consumer and machine engineering stocks underperforming. Commodity exchanges also failed to avoid a correction, as oil futures retreated to around USD 68/bbl and industrial non-ferrous metals gave up roughly 3-5%.

According to our estimates, Wednesday morning's news flow is unfavorable for the Russian equity market and we expect the indices to kick off lower at the open. Commodity and financial stocks will likely come under the heaviest pressure. Issuers geared towards domestic demand could slightly outperform. In the second half of the session all eyes will be on US unemployment data.

Daily Review. 1st September, 2009

2009-09-01T07:02:00.000+04:00

Domestic equities moved lower Monday on global investors’ worries about a slowdown in the global economic recovery and bearish trends on commodity exchanges, with the MICEX Index shedding 1.7% and the RTS Index easing 2.1%.

Quite predictably, metals underperformed, as Norilsk Nickel sank 2.9%, MMK lost 2.8%, NLMK plunged 3.8% and Severstal plummeted 2.6%. O&G and banking plays traded in stride with the market, with Lukoil losing 1.4%, Gazprom pulling back 2.5%, Rosneft declining 2.3%, Sberbank dipping 1.7% and Bank VTB ending 1.4% lower. Transneft rallied 4.6% Monday on news the pipeline monopoly’s stocks were added to the MSCI Index.

After kicking off with sizeable losses yesterday, US stock indices managed to win back some turf lost intraday. As a result, the S&P 500 Index dropped less than 1%, with commodity stocks leading the decliners. Asian exchanges look bullish this morning on news China’s industrial output accelerated. Commodity markets looked bearish Monday, with oil futures slipping below USD 70/bbl and non-ferrous industrial metals also trading in negative territory.

We believe Tuesday morning's news flow is neutral for the Russian market and we expect market players to make attempts to at least offset yesterday’s downturn. O&G plays and banking names could top the list of outperformers today. We recommend mid-term investors to take caution in view of the high market valuations at the moment and the fact that the market tends to move lower rather than higher in September.

Daily Review. 28th August, 2009

2009-08-28T07:04:00.000+04:00

Oil prices continued to sink on Thursday, dragging down domestic stock indices. As a result, the benchmarks closed in negative territory, with the RTS Index easing 0.15% and the MICEX Index shedding 1.79%.

Due to a drop in oil contracts O&G names underperformed, as Gazprom lost 2.6%, Rosneft declined 2.8% and Lukoil skidded 3%. Domestic banking issuers trended down along with the market, with Sberbank giving up 1.4% and Bank VTB shedding 1.2%. Statements made by the Chinese government about its intention to cut output in the steel industry dented steel shares, as MMK slid 2.2%, NLMK dropped 1.3% and Severstal plunged 4.2%.

US stocks landed in positive territory yesterday, with the S&P 500 Index adding a modest 0.3%. Optimism came from the publication of US GDP data for 2Q 2009 which overshot expectations. An uptick in crude prices turned out to be another upside driver. Asian exchanges are looking mixed this morning, with O&G plays back in vogue. However, unemployment data released by Japan came in higher than analysts expected, putting pressure on the markets. After a steep decline, oil prices rose sharply on the heels of US economic data and a weakening dollar. Brent contracts are currently trading above USD 72.50 per barrel.

We think Friday morning’s news flow is favorable for the Russian equity market. O&G plays could be break out to the upside today on the back of rising oil prices, lending support to the market as a whole. Lukoil is set to unveil its 1H 2009 US GAAP financials today which could impact sentiment vis-à-vis this stock.

Daily Review. 27th August, 2009

2009-08-27T07:35:00.000+04:00

Domestic stocks turned bearish Wednesday. Falling crude prices became a major factor pushing down the key benchmarks, with the RTS Index losing 2.81% and the MICEX Index shedding 1.44%.

O&G plays headed south on the heels of falling oil futures, as Gazprom gave up 1%, Rosneft tumbled 1.7% and Lukoil pulled back 2.1%. Domestic banking names moved lower in stride with the market, with Sberbank and Bank VTB taking a 0.9% drop. Demand for steels again looked patchy, as MMK gained 1.1%, NLMK plunged 5.1% and Severstal eased 0.4%.

US benchmarks closed Wednesday without any major fluctuations. Despite better-than-expected new home sales data, investors were disappointed by durable goods orders and also statements by the Chinese government about its intention to cut production, especially in the steel sector. Against this backdrop, Asian indices are in retreat this morning. Yesterday’s publication of the US mid-week petroleum inventory report produced no tangible impact on the oil market, with Brent currently trading around USD 71.50 a barrel.

According to our estimates, Thursday morning's news flow looks moderately negative for the Russian stock market. Flat crude prices will not likely impact the market or O&G plays. At the same time, a downturn in Asian benchmarks and US index futures could put pressure on domestic indices. A contraction in global steel issuers could exert an adverse impact on domestic steel names. On the second-tier front, Akron and X5 Retail Group are set to release their IFRS 1H 2009 financials today, which could influence their stock performance. Two important indicators from the US – 2Q 2009 GDP and jobless claims – are due out at 4.30 pm Moscow time today.

Daily Review. 26th August, 2009

2009-08-26T07:00:00.000+04:00

Domestic equities ended on a mixed note Tuesday. Despite strong economic data from the US, a contraction in oil futures dragged down the market, with the RTS Index edging up 0.82% and the MICEX Index easing 0.42%.

By the final bell O&G plays suffered heavy losses amid a sharp drop in oil prices, but ultimately managed to close in positive territory, as Gazprom inched up 0.1%, Rosneft advanced 0.9% and Lukoil showed a 0.1% uptick. Domestic banking names underperformed, with Sberbank losing 0.9% and Bank VTB tumbling 1.6%. Steels closed mixed, as MMK dipped 1.3%, NLMK slid 0.8% and Severstal climbed 2.8%.

US benchmarks closed with moderate gains Tuesday. On the one hand, the market gained support from positive housing price data and a better-than-expected Consumer Confidence Index which improved for the first time in the past three months. On the other hand, oil prices put pressure on energy stocks. In view of favorable economic data from the US Asian indices are heading north this morning. Crude contracts recovered slightly after a steep decline on worries global oil demand would soften. Brent crude is currently trading around USD 72/bbl.

We think Wednesday morning’s news flow looks ambiguous for the Russian stock market. On the one hand, a steep decline in oil futures will put pressure on the market as a whole and especially O&G plays. On the other hand, bullish trends on global equity markets could shore up domestic indices. Gazprom is set to release its 1Q 2009 IFRS financial statement today, which could impact its stock performance. As for today’s key market drivers, we advise investors to focus on US new home sales and the mid-week petroleum inventory report.

Daily Review. 25th August, 2009

2009-08-25T07:07:00.000+04:00

Domestic equities moved higher Monday on the back of bullishness in global stock indices and a spike in oil prices, with the RTS Index soaring 3.14% and the MICEX Index advancing 1.31%.

Rising crude prices turned into a primary upside driver for O&G names, with Gazprom rising 1.2%, Rosneft jumping 2.2% and Lukoil gaining 1.8%. Demand for domestic banking names looked erratic, as Sberbank added 1% and Bank VTB ended flat. Steels posted advances in stride with the market, with MMK inching up 0.5%, NLMK advancing 1.6% and Severstal closing 1.5% higher.

US benchmarks closed on a mixed note yesterday without any major fluctuations. Financials led the underperformers on expectations of sizeable writedowns due to credit losses. Asian markets are in retreat this morning due to the release of weaker-than-expected corporate earnings reports. Crude contracts took a drop after locking in robust gains yesterday. Currently, Brent contracts are trading around USD 73.80 per barrel.

According to our estimates, Tuesday morning's news flow looks unfavorable for the Russian stock market. Lower oil prices will likely put pressure on O&G plays, while a sharp decline in US financials could push down domestic banking names. As for market drivers we advise investors to keep an eye on the US Consumer Confidence Index due out at 6 pm today.

Daily Review. 24th August, 2009

2009-08-24T07:04:00.000+04:00

Bullish sentiment prevailed in Russian trading Friday on the heels of upside in global stock indices and stronger-than-expected economic data from the US, as the RTS Index surged 3.14% and the MICEX Index spiked 4.06%.

O&G names posted advances following an uptick in oil futures, as Gazprom climbed 5.9%, Rosneft jumped 6.9% and Lukoil added 5.9% to its market cap. Sberbank stocks advanced by 3.9% in line with the broader market, while Bank VTB fared worse, adding a modest 1.8%. Steels saw strong demand, with MMK shooting up 8.7%, NLMK jumping 2.9% and Severstal rising 6.4%.

US equity markets closed in positive territory Friday, with the S&P 500 Index adding 1.9%. Optimism stemmed from secondary home sales data which sharply outpaced expectations. Some upside also came from statements made by the Fed chairman that the global economy has shown the first signs of recovery. Asian equities are moving higher this morning. Given an uptrend on commodity markets, higher demand is seen in commodity stocks. Upbeat investor sentiment has also spilled over to the oil market, with Brent contracts rising above USD 74.50/bbl.

We read Monday morning’s news flow as favorable for the Russian equity market. Commodity shares could be in demand today amid upside on commodity markets. Specifically, O&G plays could outperform today as crude oil prices continue their ascent.

Daily Review. 21st August, 2009

2009-08-21T07:08:00.000+04:00

On Thursday domestic equities moved resolutely higher on the back of a favorable environment on global equity and commodity markets, as the MICEX Index advanced 2.8% and the RTS Index gained 2.5%.

Regional telecoms emerged as Thursday’s standout gainers, taking a sharp leap in the last 2 hours of trading, with Uralsvyazinform rocketing 14%, Sibirtelecom climbing 10.2% and VolgaTelecom jumping 7.4%. O&G plays also substantially outperformed amid favorable commodity prices, as Gazprom added 3.9%, Lukoil spiked 5.8% and Rosneft ended 5% higher. State-owned banks slightly lagged behind the market, with Sberbank rising 1.5% and Bank VTB edging up 0.7%. Although metal names also underperformed, they, still managed to finish in positive territory, as Norilsk Nickel jumped 1.5%, MMK rose 0.5%, NLMK gained 2.3% and Severstal edged up 1.1%.

US stocks ended higher for the second session in a row Thursday, with the S&P 500 adding over 1% and banking stocks leading the advancers. Asian markets are mostly bearish this morning. Most benchmarks are down 1% to 2.5% under pressure from high valuations at the moment. Some negativity also came from reports that China intends to tighten bank capital requirements. Commodity prices are slightly in retreat. Specifically, oil futures slid to the USD 72-73 range.

Friday morning's news flow looks unfavorable for the Russian market and we expect further losses at the open. O&G plays, yesterday’s standout gainers, could underperform today. Norilsk Nickel will likely take a drop in response to the government’s intention to introduce a progressive nickel export duty.

Daily Review. 20th August, 2009

2009-08-20T06:58:00.000+04:00

Domestic equities closed out trading with moderate losses Wednesday on fears of global investors about slowdown prospects of the global economic recovery, with the MICEX Index edging down 0.1% and the RTS Index losing 0.8%.

O&G plays slightly outperformed the market, fed by signs of recovery on global energy markets, as Gazprom advanced 1.1%, Lukoil dropped 0.1%, Rosneft fell 0.2% and Surgutneftegaz gained 3.2%. Banking names landed in positive territory, with Sberbank adding 1.5% and Bank VTB ending 0.5% higher. Steels underperformed on fears China’s steel demand would deteriorate, as Severstal declined 1.1%, MMK lost 1.5% and NLMK tumbled 1.3%. RusHydro turned out to be the day's standout loser, taking another 11% dive after trading resumed.

US equities were bearish Wednesday, but intraday investor sentiment changed and benchmarks ended with a 0.5% gain. The market drivers were strong earnings reports and a spike in oil futures. Asian stocks are heading north this morning, with consumer and O&G names leading the gainers. The release of the US mid-week inventory report sparked a rally in oil contracts, as Brent futures climbed to nearly USD 75. Base non-ferrous metals gained on a weakening dollar.

According to our estimates, Thursday morning's news flow is favorable for the Russian equity market, with O&G and banking stocks looking the most attractive. Data on the breakdown of gold demand in 2Q09 that showed weakness of the jewelry industry and cooling investment demand will exert an adverse impact on gold-mining stocks.

Daily Review. 19th August, 2009

2009-08-19T08:22:00.000+04:00

By Tuesday’s final bell domestic equity benchmarks showed no major fluctuations despite heavy intraday volatility, as the MICEX Index ended flat and the RTS Index inched down 0.4%.

Even through crude prices stabilized O&G plays underperformed, with Gazprom losing 2.1%, Lukoil shedding 1.4% and Rosneft easing 0.5%. Banking names closed in positive territory, as Sberbank gained 1.1% and Bank VTB achieved a 5.1% gain. Unofficial information about the placement price (nearly a 20% premium to the market) became a powerful upside driver for VTB. No single trend was seen in metal issuers, with Norilsk Nickel edging up 0.3%, MMK rising 0.7%, NLMK skidding 2.4% and Severstal advancing 1.2%. Tuesday’s unrivalled gainers were power utilities, as Irkutskenergo shot up 24.9%, Kuzbassenergo soared 16% and Yakutskenergo surged 10.2%.

US benchmarks won back some losses from previous sessions on Tuesday despite the release of weaker-than-expected July PPI numbers. The S&P 500 Index gained 1% with financials leading the market. Asian markets are mixed this morning and commodity issuers are among the underperformers. Yesterday commodity markets saw a sharp rise in crude prices after the API numbers came out stronger than expected, as Brent futures climbed above USD 72/bbl. Base metal prices remained largely unchanged.

According to our estimates, Wednesday morning's news flow is favorable for the Russian market and most liquid names will likely kick off to the upside. O&G names on the heels of rising oil futures and financials could outperform today.

Daily Review. 18th August, 2009

2009-08-18T07:43:00.000+04:00

A large-scale downturn on global stock and commodity markets left no choice for Russian equities where to head, with the MICEX Index sliding 3.5% and the RTS Index taking a 5.1% decline.

O&G plays traded down in synch with the market, as Gazprom sank 4.6%, Lukoil plunged 3.1% and Rosneft gave up 5%. State-run banking names slightly outperformed, with Sberbank ending 3.5% lower and Bank VTB pulling back 2.4%. Norilsk Nickel saw 3.5% shaved off its market cap amid a sharp decline in the holding’s primary commodity groups. On the average steels continued to outperform, as MMK edged up 1%, NLMK dropped 2% and Severstal plummeted 3.9%.

A downtrend extended on American equity markets Monday on investor concerns the economic recovery could slow down. The S&P 500 Index sank 2.5%, while financials and commodity plays led the decliners. Asian markets are moderately bearish this morning, with commodity stocks underperforming. Commodity markets recovered after yesterday’s pullback, as Brent futures again jumped above USD 70 per barrel and industrial non-ferrous metals also gained in value.

According to our estimates, Tuesday morning's news flow is largely neutral for the Russian equity market and it cannot be ruled out that domestic issuers could attempt to win back some of yesterday's losses at the open. However, for a large-scale correction investors need support from strong economic data (US PPI). Provided that an upbeat scenario unfolds, steels and Sberbank could head up the list of gainers.

Daily Review. 17th August, 2009

2009-08-17T06:59:00.000+04:00

A wave of sell-offs which was triggered by weaker-than-expected economic data from the US hit the Russian market right before the closing bell Friday, with the MICEX Index plunging 2.5% and the RTS Index advancing 0.5%.

O&G plays slightly underperformed the market, as Gazprom lost 3.2%, Lukoil sagged 2.7% and Rosneft plummeted 3.2%. Domestic banking names headed south along with the market, with Sberbank taking a 2.8% drop and Bank VTB falling 1.6%. Norilsk Nickel (up 1.9%) was buoyed by high prices for the holding’s primary commodity groups. Steels turned in mixed performances as the environment remained favorable, with Severstal edging down 0.3%, NLMK advancing 0.9% and MMK pulling back 3.3%.

American indices moved lower on Friday under pressure from worse-than-expected economic data (the Consumer Confidence Index showed a reading that was lower than expected) and high market valuations. The S&P 500 Index lost around 1.5%, with commodity and machine engineering stocks leading the decliners. Asian markets are trading in negative territory this morning, with the key benchmarks down around 2-3% and commodity issuers underperforming. Friday’s correction on commodity exchanges spilled over into trading morning, with WTI futures sinking below USD 67 per barrel and industrial non-ferrous metals also heading lower.

According to our estimates, Monday morning's news flow is unfavorable for the Russian stock market and further losses at the open look inevitable. Commodity issues, first and foremost, O&G and metal plays, will likely come under the heaviest pressure. Retail and telecom stocks could turn into a local safe haven today.

Daily Review. 13th August, 2009

2009-08-13T08:02:00.000+04:00

Domestic benchmarks opened in negative territory Wednesday amid external weakness and a falling ruble, but in the second half of the day the indices managed to claw back losses on a rebound in crude prices and an increase in US index futures, with the RTS Index advancing 0.83% and the MICEX Index adding 1.60%.

O&G names moved higher following an uptick in oil futures, as Gazprom was up 0.4%, Rosneft jumped 1.4% and Lukoil jumped 0.9%. The ruble’s firming in the second half of the session stoked demand for domestic banking names, with Sberbank gaining 2.4% and Bank VTB ending 1.9% higher. Demand for steel names was choppy, as MMK spiked 4.2%, NLMK added 1.1% and Severstal rose 0.7%.

US benchmarks advanced over 1% Wednesday on the Fed’s decision to leave the federal funds rate unchanged. Optimism also came from comments by Fed chairman Ben Bernanke about progress of the economy and the US Central Bank’s intention to keep interest rates low. Asian benchmarks are higher on this news today. Oil futures, despite larger-than-expected builds in US oil inventories, are rising on the back of a weakening dollar and expectations global demand for black gold would grow. Brent contracts are currently trading around USD 73.30 per barrel.

We think Thursday morning’s news flow is favorable for the Russian equity market. We expect most liquid names to post advances at the open. O&G plays could outperform today on the heels of rising oil prices. Investors are waiting for a string of market-driving macroeconomic data due out today. We advise investors to keep an eye on the Eurozone’s GDP data for 2Q 2009, retail sales and US jobless claims.

Daily Review. 11th August, 2009

2009-08-11T07:13:00.000+04:00

On Monday domestic benchmarks turned bearish under pressure from falling oil prices and weak performances of European and American bourse, with the RTS Index tumbling 1.38% and the MICEX Index giving up 1.28%.

A pullback in oil futures pushed down the market caps of domestic O&G names, as Gazprom slid 2.4%, Rosneft declined 1.3% and Lukoil dropped 2.6%. Domestic banking names headed south along with the market, with Sberbank inching down 0.2% and Bank VTB sagging 2.6%. Steels managed to post advances amid favorable prices in the sector, as MMK added 2.1%, NLMK gained 2.3% and Severstal edged up 0.5%.

American benchmarks closed in the red Monday, but mostly with marginal fluctuations. Equity indexes corrected down after several sessions of gains and also following an uptick in commodity issuers. Asian stock exchanges look mixed this morning. Insurance stocks are going strong after insurers published strong earnings reports. Meanwhile, metal names are moving lower amid falling metal prices. Crude futures took a marginal drop and Brent contracts are currently trading around USD 73.50 per barrel.

We think Tuesday morning’s news flow is ambiguous for the Russian stock market. Lower oil prices will likely put pressure on O&G plays. A decline in Asian metal stocks could exert an adverse impact on domestic metal names. Domestic banking stocks have a chance to outperform. The publication of a 2Q 2009 US GAAP financial statement could impact the performance of Mobile TeleSystems.

Daily Review. 10th August, 2009

2009-08-10T08:19:00.000+04:00

Domestic equity benchmarks moved lower Friday afternoon as market players opted for profit taking, but strong US economic data released at 4.30 pm galvanized trading. The RTS Index was short of time to show green on the screen, landing 0.34% lower, while the MICEX Index advanced 2.14%.

O&G plays headed higher along with the market, as Gazprom jumped 2.6%, Rosneft added 2.2% and Lukoil jumped 1.7%. Domestic banking names outperformed, with Sberbank leaping 3.4% and Bank VTB climbing 4.1%. Steels locked in gains in stride with the market, as MMK leapt 1.5%, NLMK ended 1.6% higher and Severstal added 2.7% to its market cap.

American indexes closed in positive territory Friday, with the S&P 500 Index adding 1.3%. Optimism stemmed from unemployment data which showed a reduction for the first time since April 2008 against an expected increase. Against this backdrop, Asian indices have been moving higher this morning, with a jump in Japan’s manufacturing equipment production orders acting an additional upside driver. After a pullback due to a firming dollar crude contracts are rising this morning, with Brent futures topping USD 74/bbl.

We think Monday morning’s news flow is favorable for the Russian equity market. If oil contracts continue to ascend, O&G plays could outperform the market. Gold-miners such as Polyus Gold and Polymetal, will likely be under pressure from falling gold prices.

Daily Review. 7th August, 2009

2009-08-07T10:27:00.001+04:00

Domestic trading was marked by a fair degree of volatility Thursday and benchmarks closed mixed, with the RTS sliding 1% and MICEX edging up 0.7%.

Financials, except for Bank VTB (off 0.7%), outperformed, as Sberbank advanced 1.9%, Bank Vozrozhdenie added 1.1% and Bank Saint Petersburg shot up 7.3%. O&G plays traded in synch with the market, as Gazprom jumped 1.2%, Rosneft ended 0.8% higher and Lukoil inched down 0.1%. In the metals sector, Norilsk Nickel achieved a 1.5% gain, while other steel makers underperformed, with MMK tumbling 0.7%, NLMK dropping 1.3% and Severstal falling 2.5%.

US indices closed lower on Thursday under pressure from high market valuations and worries it would take the global economy longer than expected to recover. The S&P 500 Index ended 0.5% lower. A wave of pessimism spilled over to Asian trading floors this morning and key regional benchmarks lost up to 2%, with commodity and financial plays leading the decliners. Commodity markets experienced a correction after seeing strong gains in previous sessions, with Brent contracts dropping below USD 75/bbl and base metals losing 3-5% of their value.

Friday morning's news flow looks unfavorable for the Russian stock market today and blue chips could open to the downside. Stocks of Norilsk Nickel’s, steel makers and financials could come under the heaviest pressure today. A string of US jobs data, due out in the second half of the day, will likely take center stage.

Daily Review. 6th August, 2009

2009-08-06T07:23:00.000+04:00

Domestic equities traded up on Wednesday morning. However, after downbeat US stats were released and oil prices retreated, the benchmarks headed south and showed mixed performance, with the RTS Index rising 1.84% and the MICEX Index closing 1.63% lower.

Yesterday’s US oil inventory report triggered a downturn on the oil market, with key sector names taking their cue from this event, as Gazprom declined 1.5%, Rosneft fell 1.9% and Lukoil lost 1.3%. Domestic banks slightly underperformed the market, with Sberbank tumbling 2.4% and VTB closing 3.0% lower. Steel names were also hit by a wave of sell-offs, with MMK pulling back 3.7%, NLMK plunging 6.4% and Severstal dipping 3.3%.

US benchmarks closed in the red Wednesday, with the S&P500 down 0.3%. Bearish sentiment was caused by a weak labor market numbers and non-manufacturing data also failed to please investors. Asian market are trading predominantly in positive territory on the back of upbeat corporate reports. Oil prices sank after the US inventory report was released, but quickly rebounded. Brent futures are currently correcting down after gains, hovering around USD 74.80 a barrel.

We read this morning’s news flow as largely negative for the Russian stock market. If oil prices fall further, both O&G plays and the market as a whole could come under pressure. A downturn on the metals market could drag down metals and mining stocks. ECB and the Bank of England are due to come out with decisions on key lending rates today, which could impact market trends. The consensus is that the rates will be left unchanged. The US unemployment report is due out later today and could also impact market sentiment.

Daily Review. 5th August, 2009

2009-08-05T07:34:00.000+04:00

The Russian market saw a fair amount of red ink on Tuesday, but rising commodity prices pushed Russian shares into positive territory, with the MICEX Index inching up 0.3% and the RTS Index advancing 0.6%.

O&G plays rose in stride with the market, as Gazprom ticked up 0.2%, Rosneft rose 1.1% and Surgutneftegaz climbed 0.5%, with Lukoil being the only stock to buck the trend, down 0.3%. Banks shares were under pressure from the weak 1Q 2009 financials released by VTB, with Sberbank gaining 0.6%, VTB losing 2.9% and Vozrozhdenie closing flat. Steel makers corrected down after recent robust gains, as NLMK fell 5.0% and MMK declined 1.8%. Severstal bucked the trend, up 2.0%.

The US stock market posted modest gains on Tuesday, with the S&P500 adding 0.3% and financial stocks emerging as the top advancers. Asian markets are predominantly trading in the red this morning, with the key regional benchmarks losing up to 1.5%. Commodity markets continued to challenge new highs on the back of a weakening dollar, with Brent futures closing in on a YTD high of USD75 a barrel, nickel hovering around USD 20,000 per ton and copper rising above USD 6,000 per ton.

Despite robust gains on commodity markets, we read this morning’s news flow as neutral for the domestic equity market. Current price levels reflect the high valuation of the Russian market as a whole and we believe that a local correction is justified. In our opinion, bank shares and NorNickel could emerge as today’s frontrunners.

Daily Review. 4th August, 2009

2009-08-04T07:55:00.001+04:00

The domestic equity market remained in rally mode Monday backed by rising commodity prices and European stock markets. In the upshot, the MICEX Index advanced 4.3% and the RTS Index surged 5.0%.

O&G plays rose in stride with the market, as Gazprom added 4.3%, Lukoil rose 2.6%, Rosneft climbed 4.2% and Surgutneftegaz soared 5.1%. Metals which had been among the best performers for several trading sessions also failed to outperform the market, with NorNickel climbing 4.3%, MMK rising 3.8%, NLMK shooting 8.3% and Severstal closing 2.2% higher. Bank shares were among the top gainers, as Sberbank spiked 9%, VTB gained 3.8% and Vozrozhdenie leapt 5.1%.

The US market traded up on the back of favorable macroeconomic indicators. The S&P500 added 1.5% rising above the 1,000 mark for the first time since November 2008. Commodity and financial shares outperformed the market. Asian markets are currently showing mixed performance. Bullishness prevails on commodity markets, with Brent futures trading above USD 73 a barrel and industrial metals posting solid gains and hitting new YTD highs.

We view this morning’s news flow as moderately upbeat for the Russian equity market. In our opinion, NorNickel and oil plays could emerge among the frontrunners. Meanwhile, investors are advised to focus on the high valuation of the Russian market and the increasing likelihood of a correction.

Daily Review. 3rd August, 2009

2009-08-03T10:19:00.000+04:00

The Russian stock market moved higher Friday on the back of rising commodity prices and an upbeat 2Q 2009 US GDP reading, with the MICEX Index adding 0.7% and the RTS Index closing 1.6% higher.

Metal names led the pack, as NorNickel jumped 2.7%, MMK climbed 3.6%, NLMK advanced 4.0% and Severstal surged 8.4%. O&G plays traded in line with the market despite a rise in oil futures, with Gazprom ticking down 0.1% and Lukoil and Rosneft closing flat. Sberbank lost 0.3% bucking the market trend, whereas VTB unexpectedly spiked 9.8%.

US benchmarks ended flattish on Friday, with financial and O&G names enjoying the strongest demand on a relatively flat market. Asian markets are trading predominantly in positive territory this morning, with financial and commodity stocks also seeing gains. Bullishness prevails on commodity markets, with Brent trading above USD 72 a barrel and base metals continuing to challenge YTD highs.

We read this morning’s news flow as positive for the domestic equity market and expect to see NorNickel, Sberbank and O&G equity plays outperform. The US industrial output report due out later today could impact Russian market sentiment.

Daily Review. 31st July, 2009

2009-07-31T07:13:00.000+04:00

Russian blue chips locked in solid gains in Thursday’s trading session on the back of favorable corporate reports, an upbeat US jobs report and an upsurge on commodity markets, with the MICEX Index spiking 6.0% and the RTS Index advancing 2.8%.

O&G stocks emerged among the top advancers as oil prices rallied back to USD 70 a barrel. In the upshot, Gazprom soared 7.1%, Lukoil shot up 6.4% and Rosneft climbed 5.1%. State-run banks slightly outperformed the market, with Sberbank rising 7.6% and VTB adding 6.3%. Metal names traded up in line with the market, Norilsk Nickel gained 6.0%, MMK advanced 5.3%, NLMK went up 5.2% and Severstal closed 5.0% higher.

A bullish mood prevailed on the US market Thursday following the release of a favorable labor market data and upbeat earnings reports. The S&P500 added 1.2%, with commodity and financial names among the frontrunners. Asian markets are also trading up this morning, with the key benchmarks up 1.5-2.5%. Commodity markets saw robust gains yesterday afternoon, with Brent futures rising back over USD 70 a barrel and copper and nickel hitting 2009 highs.

We read this morning’s news flow as positive for the Russian stock market and expect domestic equities to open higher, although gains could be smaller than yesterday. Out top picks today include NorNickel and steel makers. In the afternoon, market sentiment will be driven by the US 2Q 2009 GDP report, with the consensus forecast calling for -1.5%.

Daily Review. 30th July, 2009

2009-07-30T08:02:00.000+04:00

Russia’s equity benchmarks traded down Wednesday on a negative external news flow. Rising European stock indexes lent support to the market throughout the trading session, which, however, was offset by a downturn in oil prices. As a result, the RTS Index declined 2.80% and the MICX Index shed 1.54%.

Oil prices headed south dragged down by lower oil prices, as Gazprom declined 1.54%, Rosneft ticked down 0.1% and Lukoil dipped 0.8%. Bank shares slightly underperformed the market, with Sberbank shrinking 2.4% and VTB losing 2.4%. Steel makers showed mixed performance, as MMK fell 1.2%, NLMK rose 0.4% and Severstal advanced 1.6%.

The US stock market closed in negative territory yesterday, with the S&P500 falling 0.5%. The market tracked commodity shares under pressure from lower oil and metal prices. Asian stock markets are trading down today for the same reasons. Oil prices took a dive after the mid-week US oil inventory report, which revealed a 1.5% rise in oil inventories vs. the estimated decline. Brent is currently trading at USD 66.5 a barrel.

We view this morning’s news flow as negative for the domestic stock market which will most likely gap down after yesterday’s decline in commodity stocks. However, higher futures for US benchmarks could lend support to Russian stock indexes. The US unemployment report due out at 4:30 pm MSK could impact today’s market sentiment.

Daily Review. 29th July, 2009

2009-07-29T10:11:00.000+04:00

Russian equities opened higher again on Tuesday. However, most blue chips saw sell-offs in the afternoon in a bout of profit-taking driven by bearishness on European markets and weaker oil prices, with the RTS Index declining 3.45% and the MICEX Index closing 3.28% lower.

O&G stocks headed south, dragged down by declining oil futures, as Gazprom plunged 5.2%, Rosneft lost 2.4% and Lukoil tumbled 3.1%. Domestic bank names traded in stride with the market, with Sberbank falling 3.4% and VTB decreasing 3.9%. Steel makers were also hit by sell-offs, as MMK plummeted 8.5%, NLMK fell 2.4% and Severstal closed 2.0% lower.

The US stock indexes closed in negative territory, with NASDAQ being the only benchmark to buck the trend. Trading was impacted by weak macroeconomic data, mainly a lower-than-expected Consumer Confidence Index. Corporate reports from large issuers also failed to cheer investors. Asian markets are trading largely in negative territory, with commodity stocks in negative territory. Oil prices are in retreat due to a stronger dollar and expectations of higher oil inventories. Brent is currently trading around USD 69.5 a barrel.

We read this morning’s news flow as negative for the Russian stock market. Yesterday’s correction could spill over into today’s mood. Commodity stocks could underperform the market on the back of declining oil prices and industrial metals, except for gold makers, which could be backed by higher gold prices. The mid-week US oil inventory report could impact oil market price trends.

Daily Review. 28th July, 2009

2009-07-28T08:17:00.000+04:00

Russian equities headed north Monday on the back of higher oil prices and better-than-expected macroeconomic indicators, with the RTS Index climbing 2.47% and the MICEX Index closing 0.91% higher.

Oil and gas shares showed mixed performance due to a correction in oil prices, with Gazprom adding 0.3%, Rosneft ticking down 0.1% and Lukoil declining 1.4%. Financial plays outperformed the market, as Sberbank rose 2.5% and VTB advanced 2.1%. Steel names were mixed, with MMK losing 1.5%, NLMK adding 0.8% and Severstal gaining 2.1%.

The US stock market closed Monday with modest gains, as the Dow Jones inched up 0.1%. The market was driven by new home stats in the US which spiked 11% vs. the 3% consensus estimate. The Asian markets are a mixed bag today, with banking stocks and steel makers seeing the strongest demand on expectations of upbeat earnings reports from these sectors. Oil prices corrected down marginally, with Brent futures trading at USD 70.8 a barrel.

We view this morning’s news flow as neutral for the Russian stock market. As a result of a pullback in oil prices, O&G names could slightly underperform the market. Rising market caps of Russian steel makers could lend support to domestic metal stocks. Investors are advised to focus on the US CPI report due out at 6 pm MSK today.

Daily Review. 27th July, 2009

2009-07-27T06:58:00.000+04:00

Domestic blue chips opened to the upside on Friday on the back of bullishness on international stock markets and oil prices. However, the benchmarks ended mixed due to profit-taking, with the RTS Index closing 3.76% higher and the MICEX Index shedding 0.43%.

Gazprom underperformed O&G plays, down 2.6%, whereas Rosneft added 0.9% and Lukoil ticked up 0.2%. Domestic banks headed south largely in line with the market, with Sberbank declining 1.0% and VTB losing 0.5%. Steel makers posted the biggest losses as part of a correction following strong gains, as MMK plunged 4.1%, Severstal shrank 2.7%, while NLMK rose 3.3%.

US equities also showed mixed performance on Friday, with no major fluctuations, capping a second week of gains. The S&P500 climbed more than 4% last week. Investor optimism is being driven by strong corporate reports and upbeat macroeconomic data. Asian markets are also trading in positive territory for the same reasons today. Upbeat sentiment on international stock markets also pushed up oil prices, with Brent hovering around USD 71 a barrel.

We read this morning’s news flow as upbeat for the Russian stock market. Higher oil prices could make oil and gas plays the top advancers. New home stats in the US due out at 6 pm MSK could impact today’s trading.

Daily Review. 24th July, 2009

2009-07-24T08:23:00.000+04:00

Russian equities moved higher Thursday on the back of a positive domestic and external news flow, with most of the gains coming in the last hour before the closing bell. In the upshot, The MICEX Index surged 5.2% and the RTS Index closed 1.3% higher.

NorNickel topped the list of gainers, soaring 9.1%, on the back of higher prices for the holding’s core products. Banking shares, the most sensitive to economic growth, outperformed the market, with Sberbank spiking 6.3%, VTB advancing 6.1% and Vozrozhdenie shooting up 8.5%. Oil and gas stocks headed north in stride with the market, as Gazprom climbed 5.9%, Lukoil rose 5.3% and Rosneft climbed 5.3%. After a few days of unbroken growth, steel makers slightly underperformed the market, as Severstal dropped 1.1%, NLMK advanced 2.2% and MMK closed 5.8% higher.

The US stock market posted strong gains yesterday on an upbeat labor market report. Dow Jones broke through the 9,000 mark for the first time since January. Financial and commodity stocks emerged among the top advancers. Asian markets are trading in positive territory this morning, with the key benchmarks up about 1%. Although the dollar moved higher on the local market, the rally on commodity markets continued undeterred, with Brent closing in on USD 70 a barrel and industrial non-ferrous metals hovering around record YTD highs.

Friday morning’s news flow looks conducive to more upside on the Russian equity market. A slowdown in Russian GDP decline in June also acts as an additional domestic driver. We expect the companies most sensitive to economic growth, including NorNickel, banks, steel makers, to remain the top picks. Rising oil prices will lend support to O&G plays.

Daily Review. 23rd July, 2009

2009-07-23T08:18:00.000+04:00

Domestic equities capitalized on external ambiguity Wednesday for a local correction after several days of gains. In the upshot, the MICEX Index tumbled 2.2% and the RTS Index gave up 2.5%.

O&G plays traded down in line with the market despite comfortable price levels of crude futures, with Gazprom dropping 1.6%, Lukoil sagging 3% and Rosneft dipping 2.2%. State-run banking names slightly underperformed, as Sberbank sank 4.1% and Bank VTB gave up 2.4%. Norilsk Nickel took a 3.6% decline despite rising prices for the holding’s primary commodity groups. Wednesday’s unrivalled leaders were steels on the heels of favorable prices in the sector both domestically and globally, as NLMK added a hefty 5.1%, Severstal climbed 4% and MMK closed 1.3% higher.

US benchmarks closed Wednesday amid modest fluctuations, with O&G plays underperforming. However, Asian exchanges are back in bullish mode this morning, driven by favorable forecasts for economic recovery of the regional economy and higher commodity prices. Brent contracts broke through the USD 67/bbl mark, while industrial non-ferrous metal prices continued to hit new YTD highs.

According to our forecasts, Wednesday morning's news flow is conducive to pushing up Russian liquid names. We’d like to highlight Norilsk Nickel and Sberbank stocks among today’s most alluring investment vehicles for the short term. The US jobs report, due out in the second half of the day, will likely rivet investor attention.

Daily Review. 22nd July, 2009

2009-07-22T07:10:00.000+04:00

On Tuesday domestic indices continued their ascent on a favorable global environment, with the RTS Index adding 1.6% and the MICEX Index settling 1.7% higher.

O&G plays outperformed as the bullish trend gains traction on international energy markets, with Gazprom jumping 2%, Lukoil advancing 2.7%, Rosneft rising 2% and SurgutNG surging 4.3%. On the average, banking names traded in synch with the market, as Sberbank rallied 3.1% and Bank VTB moved 1.4% higher. Steels were again among the day’s standout gainers on expectations steel makers would increase their 3Q 2009 earnings, as Severstal soared 6.8%, MMK climbed 4.2% and NLMK added 3.2%.

Tuesday saw another moderate upswing on American exchanges, with indices advancing by an average 0.5% and O&G plays leading the outperformers. Asian benchmarks are also moving north this morning on expectations of strong corporate earnings reports. The climate on commodity exchanges remains favorable, with oil futures rising to USD 65-67 per barrel and copper contracts hitting a record high since last October.

We believe Wednesday morning's news flow is again largely favorable for the Russian stock market. Among today’s potential top picks we’d like to highlight Norilsk Nickel and financials.

Daily Review. 21st July, 2009

2009-07-21T08:20:00.000+04:00

Domestic equities turned bullish Monday on the back of a favorable price environment on global commodity exchanges and upside on European bourses, with the RTS Index surging 5.1% and the MICEX Index advancing 2%.

O&G names slightly underperformed the market, as Gazprom added 2.7%, Lukoil edged up 0.3% and Rosneft rose 2.4%. Despite a firming ruble financial names turned in mixed performances, with Sberbank jumping 3.1% and Bank VTB easing 0.5%. Ferrous metal plays stood out among the advancer, as Severstal soared 7.1%, Raspadskaya gained 6.8%, MMK rose 3.2% and NLMK closed 2.5% higher. With global prices for primary commodity groups rising, Norilsk Nickel locked in further gains, adding 5.5% to its market cap.

US exchanges moved higher Monday on expectations the global economy is recovering, with the S&P 500 Index growing by more than 1% and commodity plays leading the gainers. Asian stocks showed similar gains this morning, with green on the screen and commodity stocks outperforming. However, the upswing on commodity markets is running out of steam, as oil futures stabilized in the region of USD 64-66 per barrel, while prices for primary non-ferrous metal groups experienced now major fluctuations

We believe Tuesday morning's news flow is again largely favorable for the Russian stock market. Ferrous metal plays and Norilsk Nickel will likely remain among the frontrunners. Solid appreciation of the national currency in recent days could also help shore up financials.

Daily Review. 20th July, 2009

2009-07-20T08:17:00.000+04:00

Friday’s uptick in commodity prices and a favorable environment on European bourses stoked a bullish trend on the Russian equity market, with the RTS Index advancing 2.4% and the MICEX Index gaining 2.9%.

Steels emerged as the day’s outperformers, with positive trends unfolding in the sector, as Norilsk Nickel leapt 6.4%, Severstal gained 6.1%, MMK climbed 2.1% and NLMK closed 3.2% higher. Banking names turned in mixed performances, with Bank VTB jumping 4.9%, Sberbank adding 1.7% and Bank Vozrozhdenie tumbling 2.5%. O&G plays traded in synch with the market, as Lukoil rose 2.1%, Rosneft jumped 2.4% and Gazprom advanced 4.6%.

US trading was low-key Friday and the key indexes closed largely flat. O&G names outperformed the market. Asian trading floors are bullish this morning on expectations of strong macroeconomic data from Europe and the United States. Banking and machine engineering stocks stood out among the day’s top gainers. Commodity exchanges continued to move north Friday on positive macroeconomic expectations of market players and a weaker dollar, as crude prices jumped above USD 65/bbl, with gains also seen in all non-ferrous and precious metals.

In our view, Monday morning's news flow looks positive. Norilsk Nickel and steel stocks issuers, the most sensitive to economic growth, could outperform. Investors will also likely focus on banking and O&G shares.

Daily Review. 17th July, 2009

2009-07-17T08:29:00.000+04:00

On Thursday domestic benchmarks closed mixed on an ambivalent news flow and an inevitable correction in many liquid names after locking in strong gains. In the upshot, the RTS Index added 1.73% and the MICEX Index edged down 0.26%.

O&G plays turned in mixed performances despite a spike in oil prices in the second half of the session, as Gazprom rose 1.2%, Rosneft inched up 0.1% and Lukoil tumbled 1.5%. In the financial sector, Bank VTB stood out, leaping 2.9%, while Sberbank saw 1.1% sliced off its market cap. No single trend shaped up in steel stocks, with MMK rallying 7%, NLMK taking a 3.4% drop and Severstal ending 0.5% higher.

On Thursday American indices landed in positive territory on a rising perception among market players that the economic recession could end as early as this year on the heels of multiple anti-crisis measures. Asian benchmarks are moving north this morning. A stronger dollar exerted an adverse impact on oil futures, with Brent contracts currently trading at USD 62.70 per barrel.

In our view, Friday morning's news flow looks ambiguous. On the one hand, upside on Asian exchanges could lend support to domestic equities. On the other hand, a drop in US index futures and falling oil prices could put pressure on the O&G sector. US new home sales data, due out at 4.30 pm Moscow time, could impact trading patterns.

Daily Review. 16th July, 2009

2009-07-16T08:20:00.000+04:00

Domestic equity benchmarks were back in rally mode Wednesday on favorable macroeconomic numbers and higher oil prices, as the RTS Index gained 2.46% and the MICEX Index surged 5.59%.

Rallying crude prices served as the key upside driver for O&G names, with Gazprom surging 6.9%, Rosneft advancing 4.6% and Lukoil soaring 7.6%. Banking names posted gains in line with the market, as Sberbank shot up 5.8% and Bank VTB moved 4.9% higher. Steel stocks, except for NLMK (up 0.9%), experienced strong demand, as MMK jumped 6.5% and Severstal ended 4.4% higher.

US trading was bullish yesterday, driven by strong corporate earnings reports released by American concerns and upbeat macroeconomic data, e.g. a rise in consumer prices and manufacturing numbers. Key indices gained an average 3%. Asian trading floors are also bullish this morning China’s Q209 GDP came in at 7.9%. According to yesterday’s petroleum report, US oil inventories dropped more than expected, pushing oil futures higher. Brent traded above the USD 63/bbl mark.

We view Thursday morning’s news flow as positive for the Russian equity market. Equity benchmarks are likely to open higher. O&G plays could lead the gainers on rising oil prices. As for important economic data, we advise investors to keep an eye on US jobless claims due out at 4.30 pm Moscow time.

Daily Review. 15th July, 2009

2009-07-15T07:49:00.000+04:00

Domestic equity benchmarks extended their gains Tuesday on rising crude futures and support from strong performances on European and American markets, with the RTS Index advancing 3.70% and the MICEX Index adding 1.16%.

O&G plays traded higher taking their cue from oil contracts, as Gazprom edged up 0.5%, Rosneft jumped 1.4% and Lukoil rose 1.4%. Sberbank stocks, off 0.5%, came under pressure after the release of weaker-than-expected IFRS financials for 1Q 2009. Bank VTB outperformed, gaining 2.5%. Demand for steel names was uneven, as MMK edged up 0.6%, NLMK rallied 6% and Severstal leapt 2.5%.

US indices closed in positive territory Tuesday, with the S&P 500 Index closing 0.5% higher. Optimism stemmed from US retail sales data that outpaced analysts’ expectations. After US stock market closed, chipmaker Intel came out with its Q2 earnings report which outstripped expectations. This triggered an uptrend on Asian exchanges, with technology stocks seeing robust demand. After a slight drop oil futures are rising, with Brent contracts trading at USD 61.50 per barrel.

We think Wednesday morning’s news flow is neutral for the Russian equity market. The domestic benchmarks could come under some pressure from falling US index futures. But if crude prices keep rising this will buoy the market and especially O&G names. As for major economic data to watch for, June CPI from the Eurozone and the United States are due out today, as well as the US mid-week inventory report that could impact oil prices.

Daily Review. 14th July, 2009

2009-07-14T07:24:00.000+04:00

Domestic stocks experienced a fair amount of volatility Monday on fluctuations in crude prices and a weaker ruble, but despite these trends the benchmarks managed to land in positive territory, with the RTS Index inching up 0.05% and the MICEX Index adding 1.17%.

Amid uncertainty on international oil markets O&G names turned in mixed performances, as Gazprom was up just 0.1%, Rosneft tumbled 0.7% and Lukoil advanced 3.1%. Domestic financials powered ahead following gains in global financials, with Sberbank rallying 4.5% and Bank VTB ending 1.3% higher. Steels underperformed, as MMK gave up 1.4%, NLMK rose 0.7% and Severstal took a 1.8% drop.

US trading was largely bullish Monday, with the key indexes adding over 2%. Financials ended among the day’s standout gainers. Asian trading floors are heading north this morning, with some upside coming from reports that Singapore's government revised upward its GDP forecast for 2009. Crude oil futures are on the rise, with Brent contracts trading above the USD 61/bbl mark.

We think Tuesday morning’s news flow is favorable for the Russian equity market. Robust gains in US financials will likely spark an upswing in domestic banking names today. The release of 1Q 2009 IFRS financials will be an important event for Sberbank today. O&G plays could enjoy strong demand on rising oil prices. As for important economic data, US retail sales and PPI data are due out today.

Daily Review. 13th July, 2009

2009-07-13T08:28:00.002+04:00

Domestic equity benchmarks extended their losses on Friday amid external weaknesses and a falling ruble, with the RTS Index diving 5.6% and the MICEX Index pulling back 2.8%.

Oil and gas names slightly outperformed despite a short-lived decline in oil prices to USD 60/bbl, as Gazprom gave up 2.5%, Lukoil edged down 0.4% and SurgutNG lost 2.4%. Rosneft led the top gainers, adding 1.7% on news the oil major could make a buyback offer at RUB 157.00 a share until August 5. Steels also largely outperformed, with MMK flatlining, NLMK tumbling 1.8% and Severstal ending 1.5% lower. In the downside, banking names stood out, with Sberbank taking a 5.1% dive and Bank VTB sinking 5.7%.

US trading was low-key on Friday, with the S&P 500 Index easing about 0.5%, while banking and O&G plays headed the list of decliners. The threat that the global economic recovery would slow down continues to keep financial markets under pressure. Against this backdrop, Asian indices are retreating this morning, down an average 1.5-2%. The decline in commodity markets has stopped, with oil futures trading around USD 60/bbl and non-ferrous metals showing relative stability.

According to our estimates, Monday morning’s news flow remains negative and Russian stocks will likely slip at the open. Stable crude prices could lend support to O&G plays, which are viewed as attractive investment vehicles now. A lower ruble exchange rate Friday will likely continue to put pressure on companies whose activites are geared towards domestic demand.

Daily Review. 10th July, 2009

2009-07-10T07:48:00.000+04:00

Domestic equity benchmarks ended Thursday marginally lower under external pressure, with the RTS Index edging down 0.5% and the MICEX Index easing 0.9%.

Banking and O&G names moved in stride with the market, as Lukoil inched up 0.1%, Gazprom lost 1%, Rosneft dipped 0.8%, Sberbank tumbled 0.4% and Bank VTB shed 1.5%. Notwithstanding a rise in primary commodity group prices, Norilsk Nickel went down 1.1%. Other steels were harder hit, with MMK sinking 6.1%, Raspadskaya diving 6.3% and TMK declining 5.6%.

US indices closed slightly in the black, buoyed by upside in financials and commodity issuers. Moderately bullish trends unfolded on Asian exchanges, with key indices adding around 0.5%. Commodity markets stopped falling, oil futures stabilized around USD 61 per barrel and industrial non-ferrous metals locked in gains after several consecutive days of losses.

In our view, Friday morning’s news flow is moderately upbeat for the Russian market. However, we see no reasons for any sustainable upside and believe liquid names will continue to consolidate positions around the current levels. O&G plays look set to outperform and banking names could also attempt to win back some losses.

Daily Review. 9th July, 2009

2009-07-09T09:01:00.000+04:00

Domestic equity benchmarks sank sharply again Wednesday on external weaknesses, with the RTS Index sliding 3.7% and the MICEX Index shedding 2.4%, with downtrend pressure seen across the board.

Gencos stood out among the day’s top decliners, with RusHydro diving 5.7%, OGK-2 slumping 5.9% and OGK-5 shrinking 6%. O&G and banking shares traded down in synch with the market, as Gazprom gave up 4.1%, Lukoil fell 1.6%, Rosneft tumbled 3%, Sberbank pulled back 2.6% and VTB sank 3.4%. In the metals sector, MMK again bucked the trend, advancing more than 4%, while other steels posted losses, with NLMK declining 2.9% and Severstal plunging 5.2%. Telecoms outperformed, as Rostelecom edged up 1.2% and MTS added just 0.3%.

US benchmarks showed no sharp fluctuations on Wednesday. Consumer stocks outperformed, while banking names led the losers. Asian trading floors look bearish on rising investor concerns that the global economy will take longer than expected to recover and lackluster corporate earnings reports. Asian key indexes are down around 1%. Commodity markets remain in negative territory, with oil futures declining to USD 60/bbl and further losses were seen in all primary groups of industrial non-ferrous metals.

We think Thursday morning’s news flow is again unfavorable for the Russian stock market, which is likely to extend its losses at the open. Commodity plays are likely to shoulder most of the external negativity and financials will also remain under pressure. As a result, we expect telecoms and precious metal issuers to outperform. All eyes will be on the US jobs report due out in the second half of today’s session.

Daily Review. 8th July, 2009

2009-07-08T08:28:00.000+04:00

Domestic equities landed in positive territory Tuesday, shrugging off external weaknesses. In the upshot, the RTS Index inched up 0.3% and the MICEX Index added just 0.2%.

State-run banking stocks outperformed, with Sberbank growing 0.6% and Bank VTB gaining 1.2%. O&G plays saw advances despite a retreat in crude prices, as Gazprom was up 0.3%, Lukoil added 0.5%, Surgutneftegaz rallied 2.8% and Rosneft slid 0.7%. Jitters that the global economy will take longer than expected to recover put downward pressure on metal issuers, except for MMK (up 3%), as Norilsk Nickel tumbled 0.9%, NLMK sank 5.3% and Severstal pulled back 3.1%.

US equity benchmarks moved lower Tuesday on escalating investor concerns that the pace of global economic recovery is slowing down. As a result, the S&P 500 Index declined 2%, while automotive and commodity names topped the list of decliners. Bearish sentiment spilled over to Asian exchanges as well, with indexes heading south this morning and financials taking the brunt. A downtrend continued on commodity exchanges, as oil contracts fell to USD 62/bbl and all non-ferrous metals are trading in negative territory.

In our view, Wednesday morning’s news flow is unfavorable for the Russian stock market and we anticipate another gap downward at the open. Banking and commodity issuers will come under the heaviest pressure, while gold-mining plays stand a good chance to outperform.

Daily Review. 7th July, 2009

2009-07-07T08:23:00.000+04:00

Heavy sell-offs hit all liquid names across the board Monday on falling crude prices and downbeat performances on global exchanges. As a result, the RTS Index slid 3.03% and the MICEX Index sank 5.02%.

Domestic O&G plays took a pounding amid decreasing oil prices, as Gazprom gave up 6.6%, Rosneft pulled back 3.6% and Lukoil tumbled 4.4%. Domestic banking stocks moved along a southbound track with the market, with Sberbank plunging 4% and Bank VTB sliding 5.2%. Steels slightly underperformed, as NLMK and Severstal plummeted 7.2% and MMK sagged 3.9%.

American exchanges opened to the downside yesterday because of falling crude futures, but the Business Confidence Index came in stronger than expected, buoying the indexes that ended the day largely flat. Asian trading looks mixed this morning, with commodity plays leading the decliners. After several bearish days oil contracts are heading north this morning, with Brent crude trading above USD 64.50/bbl.

We believe Tuesday morning’s news flow is favorable for the Russian stock market. An uptrend is possible after yesterday’s major sell-off. First and foremost, gains could be seen in O&G plays as oil prices move higher. As for economic data, we advise investors to keep an eye on Britain’s May industrial output data.

Daily Review. 6th July, 2009

2009-07-06T08:12:00.000+04:00

Domestic equities saw low-key trading on Friday in the absence of important external benchmark, with major indices experiencing minor fluctuations. In the upshot, the RTS Index dipped 1.1% and the MICEX Index edged down 0.3%.

As oil prices stabilized, oil and gas names showed mixed results, as Gazprom sank 1.9%, Lukoil added 0.4% and Lukoil jumped 1.3%. Banking issuers outperformed, with Sberbank leaping 1.9%, Bank VTB gaining 1.7% and Bank Vozrozhdenie ending 1.7% higher. Notwithstanding high prices for primary commodity groups, Norilsk Nickel gave up nearly 2%. In view of positive trends unfolding in the global metals sector steel issuers locked in gains, as Severstal climbed 3.8%, MMK rallied 3.5% and NLMK surged 3.4%.

US exchanges were closed for Independence Day celebrations Friday. Asian exchanges look mixed this morning, with commodity and energy stocks leading the decliners. A stronger dollar put pressure on commodity markets, oil futures dropped to USD 65 per barrel and all industrial non-ferrous metals are in negative territory.

According to our estimates, Monday morning’s news flow is downbeat for the Russian stock market. Commodity plays, mainly O&G names, could come under the heaviest pressure today. Banking issuers could also feel the effects of external negativity. Under the circumstances, demand for regional telecoms, as traditional defensive instruments, will likely be quite strong.

Daily Review. 3rd July, 2009

2009-07-03T08:12:00.000+04:00

Russian equities retreated Thursday on falling oil prices and downbeat US economic data fueled negativity in the second half of the session, with the RTS Index losing 1.79% and the MICEX Index plunging 3.50%.

A contraction in oil futures dragged down domestic oil and gas names, as Gazprom sagged 5%, Rosneft tumbled 3% and Lukoil declined 3.6%. Banking issuers dropped in line with the market, with Sberbank giving up 4.1% and VTB pulling back 3.3%. Steels were mixed, but outperformed intraday on expectations China’s demand for steel would grow and favorable metal prices, as MMK edged down 0.3%, NLMK rallied 5.1% and Severstal dipped 0.3%.

Bearish sentiment prevailed in US trading Thursday, with the S&P 500 Index taking a 2.9% drop. Market players were disappointed by unemployment data showing a much higher-than-expected decline in US jobs. Against this backdrop Asian indices are heading south now. US jobless data also exerted an adverse impact on crude prices, with Brent contracts currently hovering around USD 66.50 per barrel.

We think Friday morning’s news flow is unfavorable for the Russian stock market and the benchmarks are likely to gap down at the open. An uptrend in US index futures could slightly buoy the market, but falling oil prices will put heavier pressure on O&G names. As for the market drivers, we’d like to highlight EU retail sales numbers due out at 1.00 pm Moscow time. As American exchanges are closed for Independence Day celebrations today, domestic trading floors will finish the week without an important benchmark.

Daily Review. 2nd July, 2009

2009-07-02T07:20:00.000+04:00

Domestic equity benchmarks turned in strong performances Wednesday amid rallying crude futures and bullishness in global indexes, with the RTS Index edging down 0.92% and the MICEX Index advancing 4.21%.

O&G plays were in hefty demand on rising black gold prices, as Gazprom spiked 6.5%, Rosneft gained 3.1% and Lukoil leapt 3.3%. Domestic banking names traded up in line with the overall market trend, with Sberbank advancing 3.6% and VTB surging 7.3%. Quite unexpectedly, MMK outperformed the steel segment, leaping 7.1%, while NLMK added a modest 0.6% and Severstal also close 0.6% higher.

US equity benchmarks landed in positive territory Wednesday, although with modest gains (an average 0.5%). The market gained support from economic data, i.e. the Non-Manufacturing Business Activity Index and home sales data, which came in better than expected. Asian exchanges are mixed this morning, with gold miners seeing the strongest demand. After the release of the US mid-week inventory report crude prices crude prices fell sharply, with Brent contracts currently trading at USD 68.50 per barrel.

We think Thursday morning’s news flow is unfavorable for the Russian stock market. A downturn in US index futures and lower crude could put pressure on the market. Sell-offs could be seen in O&G names at the open, while Polyus Gold and Polymetal could outperform on rising gold prices. A batch of macroeconomic data capable of driving the market are due out today. Specifically, ECB’s rate decision is to be made public at 3.45 pm Moscow time and market players anticipate the European Central Bank to hold the rate steady. Unemployment data from the Eurozone and the US jobs report are also due out today.

Daily Review. 16th April, 2009

2009-04-16T15:15:00.000+04:00

Domestic equity benchmarks turned bearish Wednesday amid worse-than-expected economic data out of the US, as the RTS Index edged down 0.2% and the MICEX Index tumbled 1.4%. Banking stocks corrected down after having locked in solid gains the day before, with Sberbank plunging 3.7% and VTB sliding 2.7%. O&G names also turned in negative performances, as Gazprom slid 2.1%, Lukoil fell 0.6% and Rosneft declined 3.2%. Sell-offs also hit metal issuers, except for NLMK (up 7.6%), with Norilsk Nickel and MMK dropping 1.8% and Severstal ending 3.1% lower. US indices closed out in the black Wednesday despite weak industrial output numbers, with financials leading the gainers. Asian exchanges are moderately upbeat this morning ahead of JPM’s earnings report. Commodity markets remain quite stable, with industrial non-ferrous metals extending gains and crude futures flatlining. We think Thursday morning’s news flow is mainly upbeat for the Russian market. An uptrend in industrial non-ferrous metals will lend powerful support to Norilsk Nickel. As for financials, the release of JP Morgan Chase’s financial statement in the second half of the day will be a major event. O&G plays will likely be out of investor focus.

Daily Review. 13th April, 2009

2009-04-13T12:07:00.000+04:00

On Friday European and American exchanges were closed for Good Friday holiday and in the absence of important drivers from external domestic equity benchmarks posted further gains, with the RTS Index adding 0.8% and the MICEX Index advancing 0.5%. Bullishness in the benchmarks notwithstanding, blue-chip names closed the session on a mixed note. After Thursday’s hefty gains banking names underperformed, with Sberbank inching down 0.1% and VTB dropping 0.9%. O&G names, except for Lukoil (+1.6%), posted fractional fluctuations, as Gazprom was off 0.1% and Rosneft ended 0.3% lower. Norilsk Nickel saw robust demand, leaping 3.8%, as prices for the metal holding’s primary goods stabilized above the price level built into its corporate budget. Steels lagged behind the market, with Severstal slipping 0.7%, MMK dropping 1.5% and NLMK edging up 0.2%. A light news flow this morning sets the stage for an extension of the local uptrend. Current price levels of most liquid names, however, are not that attractive and according to our estimates, the likelihood of a correction within a week or two is fairly strong. That being said, for the time being the market’s confidence that the worst of the global economic downturn is over has stoked investors’ interest in high-risk instruments, especially financials. A firming ruble is sharpening the investment appeal of businesses that target domestic demand, among which we’d like to highlight MTS and Wimm-Bill-Dann.

Daily Review. 3rd April, 2009

2009-04-03T11:51:00.001+04:00

Domestic equity benchmarks staged a powerful rally Thursday on the heels of a global rally in anticipation of crucial decisions to be taken at the G20 summit to fight the global financial crisis. As a result, the RTS Index shot up 7.1% and the MICEX Index spiked 6.4%. Thermal gencos led the advancers Thursday, with OGK-2 surging 22.9%, OGK-6 climbing 17.8% and OGK-4 soaring 17%. Financials also outperformed the market, as Sberbank advanced 10.5% and VTB gained 6.6%. O&G names found support from a spike in oil contracts above USD 50/bbl, with Gazprom leaping 7%, Lukoil ending 6.2% higher and Rosneft climbing 8.5%. Steels, except for MMK (+7.5%), slightly underperformed, as NLMK advanced 2.5% and Severstal increased 3.9%.US stock indexes posted gains Thursday on the back of the G20’s decision to dramatically upsize funding to quell the crisis. The S&P 500 Index edged up slightly less than 3%. Asian markets are more moderately upbeat this morning, with indexes up by an average 1%. Reports from London’s G20 summit cheered commodity markets as crude futures rallied back to USD 52 per barrel. Additional support came from a weaker dollar after the ECB decided to decrease its interest rate on main refinancing operations by 0.25%, undershooting the market’s expectations. We think Friday morning’s news flow is neutral for the Russian stock market. Exchanges priced in primary G20 news yesterday and we do not rule out a correction today. With gold sliding to USD 900/oz, precious metal issuers could come under the heaviest pressure, while O&G and banking stocks could find support in crude futures trading above USD 50 a barrel. All eyes will be on the US jobs report due out later today.

Daily Review. 1st April, 2009

2009-04-01T12:25:00.000+04:00

With oil futures growing and European trading floors trading in the black, upbeat trends shaped up on the Russian stock market Tuesday, with the RTS Index adding 1% and the MICEX Index closing out 1.3% higher. Bank Vozrozhdenie stood out as the day’s top gainer, up a hefty 14.3%, on unexpectedly strong 2008 financials and 2009 operating forecasts that far exceeded market expectations. Against this backdrop, state-run banks posted gains, with Sberbank leaping 4.2% and VTB rising 2.6%. By the final bell, O&G and metal names ended on a mixed note, with Lukoil edging down 0.8%, Gazprom and Rosneft advancing 1.8%, Norilsk Nickel dropping 1%, MMK edging up 0.8%, NLMK climbing 2.4% and Severstal tumbling 2.1%. US equity benchmarks finished in positive territory Tuesday, adding an average 1%. Automotive stocks came under pressure from growing speculation that filing for bankruptcy is the best solution for them. Mixed sentiment prevails on Asian exchanges today. Commodity markets remained largely flat Tuesday, with oil contracts stabilizing in the range of USD 48-49 a barrel, while most non-ferrous metals posted marginal gains. We think Wednesday morning’s news flow is largely downbeat for the market and we expect the benchmarks to kick off to the downside. The only exception could be financials on the heels of favorable corporate news.

Daily Review. 31st March, 2009

2009-03-31T13:08:00.000+04:00

Domestic benchmarks drifted lower Monday under pressure from weakness on European bourses and a retreat in oil futures below USD 50/bbl. As a result, the RTS Index plunged 5.3% and the MICEX Index slid 6.4%.State-run banks led the list of losers, with Sberbank plummeting 11.6% and VTB sinking 9.9%. O&G names were hit by a pullback in global oil prices, as Lukoil shrank 9.1%, Rosneft plunged 8.3% and Gazprom finished 6.8% in the red. Steel issuers slightly outperformed, with MMK dropping 3.2%, NLMK losing 2.7% and Severstal diving 6%. Precious metal plays closed out the session in positive territory, as Polyus Gold gained 5.5% and Polymetal edged up 0.8%. A wave of sell-offs that began last Friday gained traction on American exchanges Monday, with the S&P 500 Index taking a 3.5% drop, while, quite predictably, financials topped the list of decliners. Bullish sentiment prevails in Asian trading this morning on expectations that Japan would enlarge its stimulus package. A rising greenback exerted an adverse impact on commodity markets, with Brent and WTI futures falling below USD 50/bbl and all key industrial metals also moving to the downside. We believe Tuesday morning’s news flow is moderately downbeat for the Russian equity market, and after two days of sell-offs the downtrend could peter out. Banking stocks will likely remain under the heaviest pressure from the external environment. If negativity prevail, precious metal makers look set to outperform, while state support to Russian auto producers could also indirectly impact steels.

Daily Review. 30th March, 2009

2009-03-30T11:29:00.000+04:00

A correction gained momentum on Russian exchanges Friday, with major indices losing around 4% each under pressure from falling oil prices and weaknesses on European bourses. Banking stocks saw sizeable losses on worries the environment in the Russian financial sector would deteriorate, with Sberbank sinking 9.5% and VTB plunging 5.6%. Metal issuers posted losses in line with the overall market trend, with Norilsk Nickel plummeting 6%, Severstal declining 4.1%, NLMK pulling back 3% and NLMK edging down 0.7%. Expectations global energy markets would turn bullish continue to provide support for O&G names, as Gazprom dropped 2.5%, Lukoil eased 1.2% and Rosneft lost 6%.The US equity market saw red ink on Friday, with key equity benchmarks dropping over 2% and financials leading the decliners. Asian exchanges also corrected down after hefty gains earlier in the week. Commodities are going down under pressure from a strengthening dollar, with Brent contracts retreating below USD 52 per barrel. A correction was seen in nearly all non-ferrous metals. According to our estimates, Monday morning’s news flow is to a large extent downbeat for the Russian equity market and Friday’s downturn is likely to continue. Banking and metal stocks could come under the heaviest pressure, while the oil patch could gain support from global crude prices, which remain above USD 50 a barrel.

Daily Review. 27th March, 2009

2009-03-27T11:53:00.000+03:00

Russian equities were driven by external ambiguity on Thursday. On the one hand, the market gained support from rising index futures in the United States, while, on the other hand, a flow of negativity stemmed from a retreat in oil prices in the second half of the session. As a result, domestic benchmarks ended on a mixed note, with the RTS Index advancing 1.58% and the MICEX Index easing 0.21%. O&G names, except for Gazprom (off 0.9%), outperformed the market despite a pullback in crude contracts in afternoon trading, with Rosneft adding 1.1% and Lukoil jumping 1.3%. After locking in solid gains Wednesday, domestic banking stocks drifted south, with VTB sliding 3.6% and Sberbank dropping 1.6%. No single trend was seen in steels, as MMK was up 1.1%, NLMK dove 6% and Severstal advanced 1%. US benchmarks again posted gains Thursday, as the S&P 500 Index added 2.3%. Optimism stemmed from better-than-expected corporate earnings reports released by some American corporations. Asian exchanges are largely bullish this morning, with commodity stocks back in vogue. After an upswing crude contracts took a drop, with Brent futures trading at USD 53/bbl. According to our estimates, Friday morning’s news flow is largely neutral for the Russian equity market. Profit-taking cannot be ruled out on the last trading day of the week, which could be sparked by a decline in US index futures and lower oil prices, exerting an impact mainly on O&G names.

Daily Review. 26th March, 2009

2009-03-26T11:59:00.001+03:00

Domestic equity benchmarks extended their gains on Wednesday after a downturn the day before, with the RTS Index advancing 2.67% and the MICEX Index surging 4.36%.Despite a retreat in crude futures O&G plays headed north in line with the market, as Gazprom gained 3.5%, Rosneft added 3.1% and Lukoil shot up 5.3%. Expectations Gazprom Neft would make a generous stock buyback offer to minorities made the oil producer the day’s standout gainer (up an impressive 14%). Domestic banking stocks outperformed on growing demand for global financials, with Sberbank climbing 8.8% and VTB soaring 9.5%. Steels underperformed amid downbeat conditions on the steel market, as MMK edged up 1.8%, NLMK and Severstal ended flat. Bullish sentiment prevailed on US exchanges Wednesday, with the key benchmarks gaining an average 1%. Optimism came from better-than-expected new home sales and durable goods orders. Asian markets are bullish this morning. A build in US oil inventories had little impact on crude oil futures, with Brent contracts trading at USD 52.50/bbl. We think Thursday morning’s news flow is upbeat for the Russian stock market. Current oil prices could lend support to the oil patch. Continuing demand for global financials could push up the stocks of domestic lenders. Today’s trading patterns could be driven by the release of final US 4Q 2008 GDP figures and also unemployment data.

Daily Review. 25th March, 2009

2009-03-25T12:13:00.000+03:00

Domestic equity benchmarks corrected down Tuesday after several bullish run that lasted for several days, with negativity coming from a retreat in oil futures. As a result, the RTS Index dipped 2.11% and the MICEX Index tumbled 4%. A drop in oil prices notwithstanding, O&G plays largely outperformed, with Gazprom pulling back 2.8%, Rosneft sliding 5.4% and Lukoil ending 3.1% in the red. Domestic banking stocks turned from lead advancers into the day’s top decliners, as Sberbank dove 8.1% and VTB sank 6.5%. Steels also underperformed the market, with MMK plunging 7.9%, NLMK plummeting 10.3% and Severstal sinking 7.4%. Norilsk Nickel lost 10.9% of its market value on reports that some of the metal giant’s transactions are being audited. US equity benchmarks trended down an average 2% on Tuesday after Monday’s rally and also under pressure from the Fed chairman’s remarks that new mechanisms need to be worked out to regulate financial companies. Asian exchanges are mixed this morning and some negativity came from data showing a sharp reduction in Japan’s exports. Crude contracts fell marginally on investors’ expectations of a build in US crude inventories. We think Wednesday morning’s news flow is ambiguous for the Russian stock market. On the one hand, a decline in oil futures will likely put pressure on O&G names and the market as a whole. On the other hand, a spike in US index futures and an uptrend on Asian exchanges could lend powerful support to the Russian market. As for important economic data, we’d like to highlight US new homes sales and the mid-week inventory report due out today.

Daily Review. 24th March, 2009

2009-03-24T11:55:00.000+03:00

Domestic stocks extended gains Monday on surging oil prices and bullishness on global stock exchanges, as the RTS Index climbed 5.78% and the MICEX Index rallied 7.29%.O&G names outperformed the market on rising oil prices, as Gazprom added a hefty 8.8%, Rosneft jumped 7.1% and Lukoil gained 6.3%. Banking stocks led the advancers on the heels of details disclosed by the US Treasury Department to rid the national banking system of toxic assets, with VTB surging 10.2% and Sberbank leaping 11%. Steels slightly lagged behind, as MMK edged up 0.2%, NLMK grew 1.5% and Severstal surged 4.2%.American equity benchmarks locked in impressive gains Monday, as the S&P 500 Index rallied over 7%. Investors were inspired by details of the new rescue plan that calls for public-private investments up to USD 1 tn. Asian indices are heading north on this news. A rally on equity markets contributed to upside on crude markets, with Brent contracts topping USD 53 a barrel. We think Tuesday morning’s news flow is again upbeat for the Russian stock market. Domestic banking stocks will likely continue to enjoy hefty demand against the backdrop of growing market caps of international financial corporations and O&G plays thanks to a rebound in oil futures. MMK’s FY 2008 financials, due out today, will be an important driver for the metal maker.

Daily Review. 23rd March, 2009

2009-03-23T12:00:00.000+03:00

Russian trading was volatile Friday on heavy external negativity, but domestic indices managed to finish the session in positive territory, with the RTS Index inching up 0.32%, but failing to hold above the 700 mark, and the MICEX Index adding 0.91%. O&G plays outperformed, except for Rosneft (down 0.4%), as Gazprom advanced 1.4% and Lukoil closed out 1.5% higher. After several bull sessions Sberbank slumped 4.8%, while VTB, on the contrary, rallied a hefty 7.7%. Demand for steels was erratic, as MMK edged up 0.2%, NLMK rocketed 11.9% and Severstal spiked 5.5%. US trading was dominated by the bears on Friday, with the S&P 500 Index tumbling 2%. Some negativity came from investors’ expectations that GE’s financials would soften. Asian benchmarks are heading north this morning on growing confidence that actions taken by various governments to restore global economies will be a success. A higher yen became another additional positive for the Japanese market. Crude futures continued to rise on a weakening dollar, with Brent contract coming close to USD 52/bbl. We believe Monday morning’s news flow is upbeat for the Russian stock market. With surging oil prices, O&G names stand a chance to lead the advancers, while a spike in the market caps of international financial institutions could drive investor demand for domestic banking stocks. As for important economic data, we’d like to highlight US secondary home sales due out today.

Daily Review. 20th March, 2009

2009-03-20T12:06:00.001+03:00

Domestic equity benchmarks headed north Thursday as crude futures rallied above USD 50/bbl and the ruble continued to firm against the dollar, with the RTS Index advancing 6.8% and the MICEX Index gaining 5.6%. Sberbank once again topped the advancers, leaping a whopping 17.5% with huge volumes of stocks changing hands. VTB, No. 2 lender, performed in line with the overall market trends (+6.6%). Despite a powerful spike in oil prices, O&G plays, except for Rosneft (+7.4%), lagged behind, as Lukoil grew 4.1% and Gazprom added 3.2%. Polyus Gold soared nearly 9%, locking in gains on a continuing uptrend in gold prices that jumped above USD 950/oz. Amid shaky global demand for base commodities steels again underperformed, with NLMK ending 4.3% higher, Severstal edging up 0.6% and MMK climbing 5.7%. US equity benchmarks corrected down Thursday after seeing hefty gains in the past two sessions, with the S&P 500 Index losing slightly more than 1%, with the steepest losses seen in financials. Moderate downbeat trends are unfolding on Asian markets this morning. Yesterday commodity markets were extremely bullish, with Brent and WTI futures rising above USD 50 per barrel, while gold and most industrial metals also took moves to the upside. According to our estimates, Friday morning’s news flow is neutral for the Russian market. We expect trading to be low-key today, not ruling out, however, a local correction on the market after Thursday’s rally. Surging oil prices could lend support to O&G names. A strengthening ruble sharpens the investment appeal of issuers that target domestic demand, among which we highlight MTS and Wimm-Bill-Dann. A pullback in financials on international trading floors could also put pressure on domestic banking stocks. However, we do not rule out abnormally strong demand for Sberbank securities.