Daily analyst comments

The volume of non-performing loans at VTB, according to bank president, Andrei Kostin, speaking at the June 29 AGM, significantly exceeds the sector average, which may put downward pressure on the company’s stock valuations. Moreover, the bank needs to accumulate large NPL provisions, which could lead to a USD 2.2 billion loss at the end of the year.

Announcements made by MRSK Holding management should have a neutral impact on electricity distributor’s stock valuations, but may exert a positive speculation-driven effect on Lenenergo and MOESK.

Lenenergo has released neutral FY 2008 IFRS results, which should not have any major impact on the company’s stock valuations.

The fact that MTS has been granted a EUR 413 million loan is favorable for the operator’s image. At the same time, no information about credit terms has been disclosed so far, so we are unable to assess the impact that the newly accrued debt may have on the operator’s financials.

We are neutral about the arrival of Nafta Moskva representatives to the PIK Group BoD. However, since Nafta Moskva has consolidated a large equity stake in PIK, we expect that the oil company’s subsidiary structures will begin to actively participate in PIK Group business activities. In the future, Nafta could help PIK Group reschedule its debts.

Export statistics for 5M 2009 clearly show that Russian methanol exports have fallen sharply. Metafrax was one of a few methanol producers who were able to reorient to the domestic market amid the unfavorable economic climate. In our opinion, the company’s focus on the internal market should help it survive the downturn until global prices for methanol rise once more.