Market Roundup

Bullishness on world trade floors on Thursday gave a leg-up to Russian stock indices; as a result, the RTS index added 0.4% and the MICEX index advanced 0.5%. Oil & gas plays outperformed the market on the back of rallying oil prices: Gazprom rose 0.5%, Rosneft edged up 0.7% and Lukoil climbed 1.3%. The banking sector posted fractional gains, as VTB ticked up 0.2% and Sberbank inched up 0.1%. Metals traded mixed: NLMK gained 0.7%, Severstal slid 0.2% and Norilsk Nickel skidded 1.3%. The power utilities sector showed similar trends, with RusHydro and Enel OGK-5 adding a respective 2.6% and 1.6% and OGK-4 shedding 2.2%. Rostelecom extended gains (up 2.0% on commons and up 4.8% on prefs), while Avtovaz soared 9.4%, leading the market higher, the same as in the previous session.Yesterdays’ upbeat real estate market statistics fed a rally on the US equity market, with the S&P 500 broad-market index adding 0.9%. Consumer stocks acted as a top gainer. Asian stock markets are on the rise this morning, with the Nikkei 225 index trading 0.6% up. Slight corrective moves are seen in oil this morning, with WTI oil contracts trading in the range of USD 74-75 per barrel. Base metals are mostly gaining in price. As for market drivers, the estimated PMI Services and PMI Composite indexes are due at 12:00 pm, July retail sales in the Eurozone are to be released in 1:00 pm and US labor market statistics for August are due out at 4:30 pm. We regard this morning’s conditions as conducive for Russian equity trading and expect Russian benchmarks to kick off to the upside this morning. It is not ruled out that Avtovaz will again be in the lead, adding on news about the price of an additional share issue.

Russian equity benchmarks posted hefty gains on Wednesday, taking cues from Western trading floors. The RTS index added 2.0% and the MICEX index advanced 1.9%. Oil & gas stocks traded up in stride with the market, as Gazprom rose 2.0%, Rosneft climbed 2.1% and Lukoil added 1.3%. Banking blue chips fared even better, with Sberbank surging 2.8% and VTB hiking 4.0%. Metals also turned in robust performances on a rally in industrial metal prices: NLMK spiked 3.0%, Severstal jumped 3.6% and Norilsk Nickel closed 2.2% up. RusHydro finished the day 0.5% higher, while MTS added a symbolic 0.1%. Avtovaz acted as a standout advancer, soaring 17.3%. The S&P 500 index added a solid 3.0% on Wednesday, pricing in upbeat news about industrial growth rates in the US. Naturally, industrials outperformed (up 3.8%). Asian markets are following US benchmarks higher this morning, also factoring in the news that the IMF has raised its outlook for economic growth in South Korea. The Nikkei 225 index is adding 0.4% at the moment. WTI oil has slightly retreated, and currently trades in the range of USD 73-74 per bbl. Base metals are showing robust growth. Of the US statistics due out today, we highlight on-line statistical data on the labor market (4:30 pm) and home sales in July (6:00 pm). We look to Europe for the PPI for July (1:00 pm). At 3:45 pm, ECB is to announce its rate decision. As expected, the bank will leave its benchmark interest rate unchanged.In our view, external factors this morning speak in favor of Russian stock exchanges opening higher this morning. Metal blue chips have a good chance to gain in value on rallying metal prices.

Russian equity benchmarks saw moderate losses on Tuesday amid weakness on world trading floors: the RTS index sank 0.4% and the MICEX index slid 0.1%.Oil & gas plays generally traded in line with the market, as Gazprom shed 0.2% and Rosneft inched down 0.1%. Lukoil lost 1.4% on news that the company did not intend to buy out 11.6% of its shares from Conoco Philips. No single trend was seen in banking issuers: Sberbank added 1.3% while VTB eased 0.3%. Metals were also a mixed bag, as NLMK declined 1.5%, Severstal advanced 0.5% and Norilsk Nickel dipped 1.7%. Most blue chips in the power utility sector finished the session in negative territory, except for OGK-4 and Enel OGK-5, which added a respective 2.9% and 0.8%. Rostelecom extended gains, up 3.4% on common shares and up 0.7% on prefs. A rally also continued in a number of inter-regional telecom shares. The S&P 500 index closed fractionally up yesterday, with gains led by telecoms companies, up an average 1.2%. Asian equity markets are heading resolutely north this morning on news about industrial production acceleration in China and upbeat data on economic growth rates in Australia. The Nikkei index is trading 0.8% up. Oil is marginally up, with WTI oil contracts hovering slightly above USD 72 per barrel. Industrial metals are showing no clear-cut trends. As for market-moving data, the European PMI Manufacturing Index is due out at 12:00 pm. The USD ISM Manufacturing Index for August and data on the July spending in the construction sector are due at 6:00 pm. We view this morning’s news as ambiguous for the Russian equity market. However, some indicators give us grounds to believe that the market could open marginally higher this morning. Good enough macroeconomic statistics could act as an upside driver for banking issuers.

On Monday the Russian benchmark stock indices reaped moderate gains, shrugging off weak macroeconomic statistics numbers from abroad. The RTS index closed up 0.4% and the MICEX index ended 0.3% higher. Gains on the market were led by telecoms. Rostelecom extended gains on news about robust dividends: prefs surged 11% and commons soared 9.1%. An array of inter-regional telecoms companies also posted solid gains on commons: Uralsvyazinform specifically hiked 4.8%, Sibirtelecom added 3.4%, North-West Telecom advanced 3.2% and Volgatelecom finished the session 2.7% up. MTS climbed 1.6%. Avtovaz shares remained on an upward trend, spiking 6.8%. Oil & gas plays were unsteady on a retreat in oil prices, as Gazprom edged up 0.4%, Lukoil declined 0.6% and Rosneft ended 0.6% lower. Mixed trends were also seen in the metal sector, where NLMK eased 0.4% and Severstal gave up 0.3%, while Norilsk Nickel closed up 1.6%. RusHydro finished 0.6% up. Banking issuers closed marginally up, as Sberbank inched up 0.2% and VTB rose 0.3%. The US stock market was under pressure yesterday from weaker-than expected macroeconomic statistics, including data on the personal incomes of Americans. The S&P 500 index sank 1.5% as a result, with losses led by financials (down 2.2%). Asian stock markets are also trading in the red this morning, with the Nikkei index losing a hefty 3.1%, with additional pressure coming from the yen appreciation against the world’s key currencies. Oil is in retreat, with WTI oil contracts trading below USD 74 per bbl. Industrial metals are mostly gaining in price.Unemployment statistics numbers in the Eurozone are due out at 1:00 pm today. US real estate market indicators for 2Q are due at 5:00 pm and the US CCI is to be released at 6:00 pm.In our view, the external climate this morning is unfavorable for Russian equities and it is highly likely that benchmarks will open lower. Banking stocks and oil & gas shares may be open to the attack. At the same time, we do not rule out that a number of telecoms stocks and Avtovaz may move further up today.

On Friday the Russian stock market posted hefty gains on news about the US 2Q GDP growth, which had beaten analyst estimates. The RTS index added 0.8% and the MICEX index advanced 0.7%. The banking sector practically traded in stride with the market, as VTB rose 0.8% and Sberbank climbed 0.8%. Moderate gains were seen in the oil & gas sector, as Rosneft added 0.6% and Lukoil picked up 0.9%. Gazprom bucked the general trend, sinking 0.1%. Metals markedly outperformed the broad market, tracking gains in metal prices, as NLMK surged 2.7%, Severstal rose 1.7% and Norilsk Nickel closed 1.5% up. Power utilities saw mixed trends, as RusHydro gave up 0.6% while OGKs traded within the range of minus 0.8% (for OGK-3) and plus 1.7% (for OGK-1). Telecoms brought a pleasant surprise, with MTS gaining 0.5% in value and Rostelem (prefs) emerging as a top gainer, powering ahead 11.4% on dividend news. On Friday US benchmarks posted solid gains, with upside fed by the positive US GDP growth data and statements by US Fed chairman Ben Bernanke about measures for economic growth acceleration. The S&P 500 broad market index advanced 1.7%, being led higher by base material stocks (up 3.2%). Optimism has spilled over to Asian trading floors, where the Nikkei index is adding 1.6% on news about the expansion of the lending program for the banking sector by Bank of Japan. Oil is gaining in price, with WTI oil contracts trading above USD 75 per barrel, as are industrial metals. As for market drivers, the Business Climate Indicator and CCIs in the Eurozone for August are due out at 1:00 pm. The string of statistical data on the personal incomes and expenses of Americans in July is due at 4:30 pm and the Dallas Fed Manufacturing index of General Business Activity for August is to be released at 6:30 pm. We regard this morning’s external environment as conducive for Russian equity trading and all the factors speak in favor of the market opening higher. Banking issuers have a chance to outperform the market.