Market Overview: Russian Stock Market (2011, wk.11)

8/7/2019 Market Overview: Russian Stock Market (2011, wk.11)

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Market Overview: Russian Stock Market RTS 2011, wk. 11

a 6.92% rise in price of its shares. The growth in price was caused by nuclear accident in

Fukushima, because many investors and traders were predicting positive changes of prices in oil

and gas market. Moreover, market started to recover its positions after 10th

week’s drop which wascaused by earthquake in Japan

Chart 2 GAZPS in week 11. Source: tikr.ru

From Monday till Tuesday Nornikel (GMKNS) faced strong fluctuations between -0.51 to

+4.14% compared to beginning of Monday. It was mainly caused by lawsuit from United

Company RUSAL, connected with dispute over shares of OGK-3, one of the Russian power companies. On Thursday price per share went up due to announcement, that lawsuit will be

postponed till the 8 of April, and interest in shares of Nornikel from one of the biggest

metallurgical holdings in Russia – Metalloinvest Management Company LLC. As a result

Nornikel ended the week with 5.66% growth in price per share, compared to Monday.

2 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in

it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.




Chart 3 GMKNS in week 11. Source: tikr.ru

The biggest downturn was experienced by Surgutneftegaz (SNGSS). Share prices

decreased dramatically by 8.53%. On Monday of 11 th week you could buy share for 0.80 EUR, and

already on Friday price was only 0.73 EUR. Decrease was caused by Federal Antimonopoly

Service’s announcement. They are considering about suing SNGSS for setting too high prices for oil. However, FAA final decision is not announced yet. Also, some investors claim that SNGSS’s

dividends are too low, increase in dividend percentage would positively affect share price’s trend.






Chart 4 SNGSS in week 11. Source: tikr.ru

Last week’s winner Tatneft (TATNS) has faced completely opposite trend this week.

TATNS is the second biggest loser, stock price decreased by 3.4%. In the beginning of the 11 th

week prices for TATNS share was 4.44 EUR, it fell to the level of 4.29 EUR. Such decline might

be result of planned project “60-66”. Minister of Energy wants to increase export taxes for dark mineral oil products, from 46.7% to 66%. Denis Borisov, analyst from Bank of Moscow, estimates

that Tatneft will lose about 200 million of their profit this year.

Chart 5 TATNS in week 11. Source: tikr.ru






Overall, the tension about the situation in Japan is gradually decreasing and next week the

level of stress will be lower. However, the happenings in the Middle East and North Africa are still

tense and a new hot-spot has appeared – Bahrain, where locals are expressing their dissatisfactionabout the political regime, which can support oil prices. At the same time Libya’s government

intends to begin negotiations with the opposition, but investors have diverse attitude about this. On

the one hand, it is a positive factor for development of the conflict, but on the other, this causes

decrease in oil prices. If the situation in Libya will stabilize, oil and gas companies may lose value.

Japan’s case with the nuclear plant provokes some negative sentiment and ambiguity, but when the

situation will be resolved, markets will grow. Meanwhile, the domestic markets have shown

stability and the prospect for next week is moderately positive. Russian stock market will move in

accordance with events in the Middle East and Japan. Many players are expecting recovery of Japan

and increasing demand for different goods and therefore growth opportunities for Russian

companies.

Review by: Laura Laube, Eriks Petrovs, Valerijs Rezvijs, Eduards Sidorovics



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Market Overview: Russian Stock Market (2011, wk.11)