RTS (Moscow) Market Overviews

One of the top gainers of the week apart from ОАО ММК, ао was ОАО ГМК Норильский никель, ао (GMKN) + 5,74% and  closing price 212.26 €. There were several reasons which positively affected this stock. First of all, leading investing companies re-estimated the value of company, by considering that this year acquired company’s international assets (LionOre, OM Group nickel assets) will increase its share in the world nickel output by 2%. Secondly, the board of GMKN approved separation of its energetic assets in new independent company "ЭнергоПолюс", and recommended to ratify dividends for 9 months at the price of 108RUB per stock, which is almost 2 times higher than of previous year. Thirdly, the company established control over one of the main Russian energetic companies ОАО ОГК-3, ао (OGKC), increasing its share by 16,5%  to 64,5%. Finally, the world prices on nickel have increased during the week. Listed here factors may have long term influence on the stocks of the company and its value may increase during the next week too, however, metallurgical sector on the whole is rather overbought and correction may happen.

 

Russian oil and gas companies’ stock prices mainly reflected the changes in oil prices, which this week renewed its historical maximums again. The top gainer was ОАО АК Транснефть, ап (TRNFP) with 6,3% and closing price 1,339.  In comparison with the numbers of the second quarter its third quarter’s net profit increased by 93%; that may be the main reason for the increase in the stock value.  The other companies also performed well, except for ОАО Сургутнефтегаз, ао (SNGS) – the top loser of the week. Weak results can be explained by poor financial and corporate figures of the company in comparison with other oil producers.

 

Losers of the week were also ОАО Банк ВТБ, ао (VTBR) -0,63% with closing price 0,0033 €  and ОАО Сбербанк России, ао (SBER) -1,38% with closing price 2,97 €. The decrease was caused by negative indicators of world major banks. Merrill Lynch and Citigroup announced that they had credit write-downs with billions of dollars lost. Now investors are cautious whether other leading banks will also have poor results and credit losses. However, in the case of Sberbank, the fall was also provided by the fact that its net profit was below analysts' expectations, with only 1,31€ billions, but not 1,45€ billions as it was expected. Next week will be rather testing for both banks, given negative external background. However, it is considered that both stocks are understated and in long run their value should increase.

 

Now RTS index is mainly supported by increasing oil prices; another factor is positive fundamental figures of most leading Russian companies. So, basically, it is expected that by the end of the year most of the stocks will extend its value. However, in short run, especially next week, it will be logical if some share prices decrease. The companies of main risk are from metallurgy, banking sphere and even oil sector, if oil price goes down. Increase is mainly expected in consumers sector.