Oct
18
Trader’s daily - October 15, 2009
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Market today. The effort for growth was in vain â all afternoon the sale was indicated on the market, despite the strong oil. The most selling was in the bank and automobile sector. Support came from the shares within the telecommunication sector.
Market tomorrow. Likely the already existing levels of oil prices are not enough any more for the further climbing of the market. Considering the market being overbought the further drop is possible.
Bonds
Market today. In the first half of the day the market continued climbing, being driven by the purchases in the FBL. The liquid corporative notes grew by 50-60 b.p. average. However in the afternoon the market corrected down. Among the most of the traded issues might be outlined Moscow 56 and 62, MTS-4, TransFinance-2, RZD-12, VK-Invest-3. In the corporate segment of the Russian market of Eurobonds things were still calm on Thursday. Along with that the issue Russia 30 was also attacked by the sellers, which by the way provoked correction at the domestic market.
Market tomorrow. Friday we suppose the purchases will continue, which will also be supported by the closing of book on Mechel.
No comment
International reserves of RF as of October 9 grew to 418.7 bn USD (CB RF)
Industrial production in RF within January-September dropped by 13.5%, oil extraction grew by 0.6%, gas output dropped by 18.6%, output of light vehicles reduced by 62%. (Rosstat)
MEDT keeps the forecast of GDP forecast in 2009 at the level of 8.6%. (Interfax referring to Klepatch)
Net profit of Transneft by IAS within 1H 2009 formed 54.6 bn RUR. (Company)
Rosneft believes liberalization of access to the shelf of the foreign organizations to be not reasonable. (Interfax referring to Bogdanchikov)
Minpromtorg supports the idea of capitalization of AvtoVAZâs debt via bonds purchase by VEB. (Interfax)
Credit load of UGMK forms about 3 bn USD.
Oct
18
Trader’s daily - October 16, 2009
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Stocks
Market today.Rapid morning upping at the Russian market on behalf of the positive close at the U.S. the day before changed to falling rather fast. The reduction was not dramatic, but was indicated on all shares. The reason for drop was the market being totally over purchased, and also the indefinite dynamics at the commodity markets. Besides that Europe was also trading in the negative zone. As a result the RTS and MICEX indices lowered by the results of the trades by almost 2%. Among the liquid shares we might outline only the notes of Rostelecom, which added more than 10% in the middle of the day with no evident reasons.
Market tomorrow. Monday we do not exclude the continuation of reduction at the domestic market. Many players are ready to fixate profit. More to that, the stats and reports, output Friday night in the U.S., do not set to optimism.
Bonds
Market today. In the first half of the day the activity at the ruble bonds market was not high. The market participants were lively by noon only. Relatively big number of deals was in FLB section, which was partially supported by the coming additional placement of 26202 next week. In the corporate segment thing were a lot calmer. After determination of the coupon rate on Mechel at the level of 12.5%, the prices of Severstal loans went up also. At the same time the issue of Mechel itself was trading at the forward market high than its nominal. Against the background of the total demand for the ruble notes offers in the rare municipal notes started appearing also. In the segment of Eurobonds the trade activity was average. Interest was in all issues of Promsvyazbank, and also in Ak Bars 2010 and 2011. New Euro MezhPromBank 2011 was being actively bought.
Market tomorrow.On Monday the purchases will likely continue. Besides zero inflation and the possible lowering of interest rates the possibility of more rapid ruble strengthening might add.
No comment
Investments by RF to the US Treasuries grew in August for the first time within 5 months. (data of FED) (Interfax)
Rate of the 1sr coupon of Mechelâs bonds for 5 bn RUR formed 12.5% annually. (Interfax)
MMC plans to close the deal on upping the share in Belon till November. (Interfax)
Norilsk Nickel with VNP plans to extract 8 mn tons of cocking coal in 3-5 years. (Norilsk Nickel)
NLMC in 3Q 2009 upped the steel production by 11% to 2.9 mn tons. (Interfax)
Renault will invest 2/3 of the amount, required for launching new models of AvtoVAZ. (AvtoVAZ) (Interfax)
Gazprombank reduced its net profit by IAS in 1H 2009 by 24% to 24.4 bn RUR, upped its reserves to 5.7%. (Interfax)
Industrial production in the U.S. in September grew by 0.7%, growth by 0.2% was expected. (Bloomberg)Trader’s daily - October 16, 2009
Aug
12
Trader’s daily - August 12, 2009
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Stocks
Market today. The trades were rather emotional â the roller-coaster, which was showed today by the Russian currency versus the bi-currency basket, leaded to the serious slipping at the beginning of trades. After that the market has partially won back the morning drop.
Market tomorrow. The decision on the rates by FED is to be waited for due to the market dynamics tomorrow will depend on it.
Bonds
Market today. At the beginning of the day ruble rate drop scared many investors, which leaded to selling in the sector of ruble bonds. The drop of ruble might be explained likely by the speculative factor, rumor on the possible devaluation of ruble and drop of the oil price. Closer to the end of the day the market was supported by the data on the trade balance of U.S., which turned out to be better than the experts expected, and the positive data on inflation in Russia during the past week. After the morning sale, in the eve the players began purchasing bonds. Today demand was for Gazprom-4, Gazprom-11, MTS-3, MTS-4. At the Eurobond market Russia-30 was trading lower than nominal during the whole day.
Market tomorrow. The market of ruble bonds tomorrow will be affected by the information on oil supplies in U.S. and report of U.S. FED that will come out today, so it is complicated to forecast tomorrow movements at the market.
No comment
Negative foreign trade balance of the U.S. upped in June by 4% versus the previous month to 27 bn USD, less than expected. (Bloomberg)
Industrial production in Eurozone has unexpectedly lowered in June by 0.6% (versus May) after May growth. (Bloomberg)
The number of citizens in the UK that are receiving the unemployment benefit, in July it upped by 24.9 thousand people to 2.24 mn. (Bloomberg)
TNK-BP in 1H 2009 reduced the selling of oil products by 6.6%, having upped the selling of oil by 7.5%. (Interfax)
Tatneft in 1H 2009 reduced oil export by 1.2%. (Interfax)
Fitch confirmed the rating of Norilsk Nickel at the level of âBBB-â, NLMC â âBB+â. (Interfax)
Net loss of KAMAZ in 1H 2009 totaled 1.6 bn RUR. (Interfax)
AvtoVAZ used up 24.32 bn RUR out of 25 bn RUR of state bail. (Interfax)
Aug
12
We revised our financial model of Novorossiysk sea trade port (NMTP) basing on the financial results by IAS for 2008 and for 1Q 2009, and also the operating results of NMTP for 1H 2009. In 2008-2009 the branch of sea transport, and also the sea port infrastructure, faced some serious problems. Late last year the global demand for the sea transport dropped 90% and the index of freight costs of Baltic Dry â by 95%.
Along with that NMTP managed to close the 2008 properly. The sales of the company grew by 35% to 654 mn USD, EBITDA formed 357 mn USD versus 191 mn USD a year before. The net profit lowered due to loss from currency exchange to 90 mn USD from 94 mn USD in 2007. In 1Q 2009 NMTP has also showed positive dynamics on sales: the income grew by 4.5% to 157 mn USD. In its turn, the lowering of global oil prices versus 1Q 2008 leaded to savings on the expenses and to the increase of operating profit and EBITDA. In 1Q 2009 the operating profit totaled 102 mn USD (+64%), and EBITDA â 112 mn USD (+45%). However, the non-operating items brought to reduction of the net profit estimate by 40.6% versus the estimate within the similar period of 2008 to 31.6 mn USD.
Note that the cargo turnover of Novorossiysk port continued climbing in 2008 and in 1H 2009. So, in 2008 the sum total cargo transshipment grew by 2.8% and within the six months of 2009 â by 11%. At the same time we would like to outline that the significant adding was indicated in the highly profitable transshipment of corn on behalf of the additional capacity at NZT terminal. The share of transshipping corn grew versus the sum total cargo turnover within the half year to 11% from 2.8% within the similar period of the previous year. At the same time the transshipping of the less profitable containers reduced by 58% due to macroeconomic conditions.
The important moment worth paying attention to is the debt load level of NMTP. The credit portfolio of NMTP in 2008 decreased by 6% versus 2007, and in 1Q 2009 â by another 3.5%. At the same time more than 90% of liabilities are the long-term ones. Debt / EBITDA ratio is at the low level: in 2008 it formed 1.42, and according to our forecasts in 2009 it will be 1.28.
Despite the above-mentioned positive moments and high profitability of the port, we have revised our estimation of the company down. First of all, we considered the new economic conditions, under which NMTP is operating. Primarily those conditions reflect on the structure of the portâs cargo turnover. So, the prospect containersâ shipping, which was so reliant on, will not be climbing that actively, and that deprives the company of additional income. Second, we accepted a rather high level of WACC. In the conclusion we would like to outline, that we assume the shares of NMTP are expensive. That is confirmed by the coefficients, provided in the public comparables estimation. As a result of the conducted research, we assign a fair value of NMTPâs shares at the level of 0.090 USD, and GDP â 6.72 USD. According to the current market quotes that indicates the 42% overestimation. We lower the recommendation from ACCUMULATE to SELL on the shares of NMTP.
Aug
12
Sales of Aeroflot in 2008 grew by 21% by IAS to the level of 4.6 bn USD. Expenses of the company were upping by anticipatory rates â 32% versus the level of 2007. At the same time the principal growth belonged to the self cost of shipping, particularly, the expenses of aviation kerosene. The costs of aviation fuel within the group increased in 2008 by 51% and totaled 1.5 bn USD. As a result, EBITDA margin reduced significantly to 10.8% versus 19.0% in 2007. Besides, the negative currency exchange rate when overestimating the liabilities on the financial leasing, affected the net profit of Aeroflot negatively â it declined by 81% versus the estimate of the previous year to 56 mn USD. Net profit margin totaled 1.2% (8% in 2007).
The positive moment of the report is the debt load of Aeroflot. Despite the net debt of the company having upped by 58% the debt / EBITDA ratio totaled 1.5 in 2008 versus 0.7 a year earlier, which is not a high estimate. Credit portfolio of Aeroflot as of the beginning of the year totaled 737 mn USD versus 511 mn USD in 2007. At the same time 80% of debts are the long-term ones. The lions share of them is formed by liabilities on financial leasing, the rate of which is not high â 3.8% in 2008.
We have revised our financial model Aeroflot considering the new data. Our estimation accounts the updated schedule of airliners supply, and also the liabilities that appear due to purchasing the jets. Mainly the airplanes will be taken for lease. By the time of the last B787 and A350, which are to come in 2019, are supplied, the ratio of financial and operating rent might form 1:1. We have also considered the decommissioning of Tu-154. The renewed aviation fleet will be more fuel-effective, which in future will support significant savings on the aviation fuel and will reflect on the companyâs profitability rather positively. At the same time the affect on the profitability will be significant due to the aviation fuel is the principal expense item for Aeroflot, which forms 36% of the entire expenses of the company (data of 2008).
Our estimation has been made considering royalty, which totaled more than 470 mn USD last year (more than 10% of sales). We would like to outline that without the âtransferâ cash Aeroflot would have been losing last year. Also the loss might have been indicated in 2009-2010. However, we assume Aeroflot will unlikely lose its royalty. According to our forecasts in 2009 the passenger transfer might reduce by 13%. However, two times drop of aviation fuel price might reflect positively on the finance of the company, which might even lead to increase of groupâs profitability by the results of 2009.
Aug
12
Daily review - August 12, 2009
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Tuesday became another day of fall at the Russian share market. At that on Tuesday there were some reasons for such drop. First negative came from the statement by Rosstat on GDP dynamics in Russia in 1H 2009, which has, choosing words carefully, âdroppedâ. That might have been the catalyst of the drop. Besides, the market was constantly alarmed by ruble, which weakened by about 1% versus the bi-currency basket, which also might be related to the sad estimates and prospects of the Russian economy. Besides, within the last trading hours in Russia the oil prices worldwide began lowering, which has added fuel to the flames and the quotes slipped even more significantly. Due to the given factor the whole oil-and-gas sector looked worse than the market. However, the companies within the other branches also did not manage to show any significant upping. We should outline MTS, which satisfied the investors with its good half year report.
Main news
MTS: improvement due to seasonal factors.
Sales of MTS, JSC in 2Q 2009 by US GAAP formed 2.02 bn USD versus 2.6 bn USD within the similar period a year before. The net profit dropped from 659 mn USD to 563 mn USD. Such information is provided in the message of the company.
Other news
Ă Export duties for oil will be upped from September 1 by 7.4%.
The oil export duty in Russia might be upped by 17 USD to 237-241 USD per ton from September 1, stated the deputy head of the department of custom duties of RF Ministry of Finance Alexandr Sakovich, imparted Interfax. We would like to remind that from August 1 the duty forms 222 USD per ton.
Ă Severstal upped the share in HighRiver Gold to 61.7% by the results of the shares buyback.
Severstal-Resource, the commodity division of Severstal, completed the buyback of shares from the minorities of High River Gold, having built up its share in the company to 61.7%. Before the offer the share of Severstal in the capital of HighRiver formed 57.3%. The buyback of shares has been conducted via the subsidiary of Severstal-Resource â Lybrica Holding. Though the number of holder that accepted the offer lower than required for the complete buyback of the company, Severstal is satisfied with having improved control in the company to 61.7%.
Aug
12
Trader’s daily - August 11, 2009
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Stocks
Market today. Reduction again, which was caused by the weak macroeconomic estimates of Russia, ruble drop and oil price down. The sale leader was the oil-and-gas sector. The shares of MTS looked better after the issue of the report that turned out to be better than expected.
Market tomorrow. Possibly the phase of the correction is coming to an end and tomorrow the attempts for play bulls will be made.
Bonds
Market today. On Tuesday lowering of ruble rate versus the bi-currency basket leaded to sale at the ruble bonds market and profit fixation. Ruble weakening has been provoked by the stats on GDP of RF, which dropped by 10.9% in annual terms and due to the rumor on possible ruble devaluation. The majority of the liquid bonds of the first and second echelons lost their positions, having lost 0.3-0.5 p.p. average by the end of the day. MTS-3 (+0.15 p.p.) is worth to be outlined among the climbing bonds. The price of Russia-30 dropped with ruble also and now is being traded lower than nominated.
Market tomorrow. Wednesday the additional placement of BFL-66 for the amount of 15 bn RUR will be conducted, high demand of those notes is forecasted. The main factor to affect the trades tomorrow will be the decision by U.S. FED on the interest rates, until then the investors will likely continue fixating profit.
No comment
By provisional estimation GDP of RF lost 10.9% in 2Q 2009. (Rosstat)
The export duty for oil from September 1 might up from 222 to 237-241 USD per ton. (Ministry of Finance of RF)
RusAl transferred 897 mn RUR for the construction of BoHEPS, having equaled its financing share with RusHydro. (Company)
South Kuzbass lowered its sales in 1H 2009 by RAS by 2.6 times to 7.4 bn RUR. (Company)
MMC began ore mining at the new deposit in Chelyabinsk region. (Company)
Net profit of MTS in 2Q reduced by 14.6% to 563 mn USD, having turned out to be higher then forecasted. (Company)
In July Magnit upped its sales by 30.3% to 14.57 bn RUR. (Company)
Aug
12
Daily review - August 11, 2009
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The new trading week began at the Russian market with moderate drop of quotes, which totally comes into the frames of correction motion after growth during the last week and the week before. However, the most part of the trading session the market managed to trade at the levels, close to Friday levels, and only in the afternoon the market started going down by higher rates. Nevertheless, no significant negative moments were indicated at the market. If only outlining the statement by Mark Mebius on the possibility of large scale correction at the global markets. The representatives of the oil-and-gas sector, which might have been related to weak lowering of the oil prices, looked worse than the market.
Main news
Mechel-Mining in 2Q 2009 reached the profitable level.
Mechel-Mining, JSC (consolidates the mining segment of Mechel group) gained 1.269 bn RUR of net profit by the results of operating in 2Q 2009, imparts the message of the company. The company relates gaining profit also to the overestimation of the subsidiariesâ securities. Within 1Q 2009 the loss of the company totaled 487.426 mn RUR, in 4Q 2008 â 68.32 bn RUR, in 3Q 2008 â 58.1 bn RUR.
Other news
Ă VMZ upped the LDP in July by 27%.
Viksa metallurgy plant (included in United metallurgy company, CJSC) upped the output of large diameter pipes by 27.4% in July versus the similar month of the previous year, to the level of 74.975 thousand tons. According to the message of UMC, by the results of January-July the output of LDP formed 538.637 thousand tons (growth by 28%).
Aug
12
Trader’s daily - August 10, 2009
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Stocks
Market today. The market was slipping within the frames of correction to growth, which was indicated earlier. Another reason of the reduction was light roll-back down at the oil market. Due to that the Russian oil chips showed the most considerable drop among the blue chips.
Market tomorrow. From the technical point of view, the Russian share market has not yet completed the full cycle of correction down. Due to that the further slipping of the market is possible. The growth rates of the drop might be such as today â no more than 2%.
Bonds
Market today. Totally the market was climbing up slightly, due to the lowering of the interest rate by CB the activity at the market was higher than usually. Most of all the players were interested in purchasing municipal bonds, which added by the end of the day 0.2 to 0.5 p.p. averagely. Among the corporate bonds purchases prevailed, though notes, which have been overbought earlier, corrected down 0.1-0.3 p.p average. At the forward market purchases were in Vimpelcom-3 and the new issues of LUKOIL. The Brent type of oil price varied during the day, having added about 1% by the end of the day, though that did not affect ruble rate that was little by little loosing its positions versus dollar. At the Eurobond market the underestimated notes were being bought, such as Tatfond-10, Eurobonds of MezhPromBank, nominated in dollars.
Market tomorrow. Tomorrow the lateral trend is most possible, without clear dynamics, we expect growth of demand for municipal and federal loans.
No comment
VMZ upped in July the production of LDP by 27%. (Company)
Mechel-Mining in 2Q reached the profitable level. (Company)
Mechel and Mitsui will be cooperating in the sphere of attracting financing and establishing a JE. (Interfax)
Magnit elaborated optional program for the management and will be buying back shares for it. (Interfax)
Aug
12
Daily review - August 10, 2009
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The close of the trading week was contradictory. Friday morning began with quotes reduction of the liquid shares within the first and second echelons against the background of negative external background. The oil prices went down versus previous day levels. The session in Europe opened with negative also due to data on the industrial production in Germany, which unexpectedly turned out to be worse than forecasted. During the day the RTS index was consolidating at the level of 1,050 points. The main activity was focused on the shares of Sberbank and Gazprom. Strong data on the employment market in the U.S., output at 4:30 pm Moscow time, resumed the interest in the market. As a result, the morning drop has almost been won back.
Main news
Transneft provided strong operating financial estimates for 1Q 2009 by IAS.
Friday Transneft output its IAS report for 1Q 2009. According to the given report the net profit of the transport company reduced in 1Q 2009 by 41.7% to 542 mn USD, versus 930 mn USD a year earlier. The sales of the company slipped by 5.6% to 2.48 bn USD versus 2.62 bn USD in 1Q 2008.
TGC-2 reported by IAS for 2008.
Sales of TGC-2 by IAS in 2008 formed 931 mn USD, having upped by 14% versus 2007.
Other news
Ă TMK negotiated 1.1 bn USD credit dating to 5 years with Gazprombank.
By the uncertain information, the company also managed to negotiate rate lowering for the credit and on upping of the gestation period from 1 year to 2 years. The company intends to negotiate credit time constrains prolongation with the Russian banks to 5-7 years via the rate from 10% to 13% annually, stated the representative of TMK.
Ă Two more IRC summed up half year results.
Sales of Uralsvyazinform in 1H 2009 totaled 20.1 bn RUR, which is 0.7% higher than the similar estimate a year earlier. The profit from selling grew by 4% to the level of 4.1 bn USD. Sales of STC in 1H 2009 totaled 10.8 bn RUR, which is 4.9% higher than the similar estimate of the previous year. The profit from selling grew by 15% to the level of 2.7 bn RUR.
Ă The former top-manager of GM Bo Andersen will come in power instead of Sergey Zanozin as the president of GAZ group.
The former top-manager of the bankrupted GM concern and the current chairman of GAZ, JSC board Bo Andersen will come instead of Sergey Zanozin as a president of GAZ group.