Daily review

Trader’s view

Trade at the Russian market was inactive yesterday: MICEX added 0.55%, RTS lost 0.07%. After Monday sale on bad news in Greece, market participants decided to wait-and-see. Even the weak data on 1Q 2012 GDP of Italy, which was worse than expected, did not force a new wave of sale. Interest in buying was on the shares of Novatek (+3.1%), Inter RAO (+3%), IRNC. Oil companies shares were for sale: (-2.48% - after the shareholders register closed), preferred shares of Transneft and Tatneft (-10% - after register close).

Yesterday, by the market close, came messages on Greece possibly having new elections after unsuccessful attempts to form the new government and that might force a new wave of fixation at the markets. Message of CB of Greece on the people actively taking their money from the banks due to fears of the state departing from the Eurozone, might lead to a serious crisis in the bank sector. Given scenario might make a total default on state bonds of Greece inevitable.

This morning the trade at Asian markets goes in the “green” zone,

futures for the American indices are climbing up. We expect the

Russian market to open with a gap upwards. This week the players get

the reports of another 100 companies of S&P 500 list (as of today 78%

of the 268 companies within S&P 500 reported better than expected),

however the main attention will switch from the corporate reports to

macroeconomic data and problems of Europe. Friday Employment

report of U.S. (unemployment report is expected to be bad) is one of

the most expected events. Additionally we expect the following: PMI

index of China, UK and Eurozone, some FRB of the U.S., ISM MFG

and non mfg on the U.S. and Europe. As for auctions, 10-year bonds

of France, Spain and UK are expected. Members of FOMC are

expected to make statements: in particular, representative of FED

William Dudley, Mario Draghi are holding a press-conference

Thursday. Significant risks are introduced by elections in Greece and

France. Win of the socialist Olland with his program of tax and state

spending raise and change of fiscal pact with Europe means a new

conflict with the policy of Merkel, and a way too divided parliament of

Greece might make the fractions unable to negotiate about anything.

Consolidated results of Inter RAO for 2011.

Inter RAO output results by IAS for 2011. Consolidated sales of the

group turned out to be 2% above our forecast, EBITDA – 2% lower.

We expect preservation of positive dynamics results of /Inter RAO

UES in 2012. High decree of uncertainty preserves in the sector of

power energy (until the regulator says its word), sum EBITDA of the

group is hard to tell for 2012. Management expects the estimate to be

within 36 to 42 bn RUR.

Financial results of IRNC Holding by IAS for 2011.

Yesterday IRNC Holding provided its IAS report for 2011. Sales of the

company considering federal subsidies upped 13% versus the

previous year. Operation profit – 9%. The net profit grew 14%.

Dividend payoff formed 1.67 bn RUR versus 0.616 bn RUR in 2010.

Severstal: 1Q 2012 operation results.

Severstal output the operation results of 1Q 2012. As expected, the

most adding of production was on American division of Severstal:

production of steel by Severstal North America formed 31% from 0.97

mn tons to 1.27 mn tons.

Trader’s view

Shares were climbing at the Russian market against the mildly positive foreign background. Output of the strong reports in U.S. and quotes’ growth at European market affected the mood of the investors.

News briefly

Energy: The merger of Gazprom energy holding and KES Holding, announced last year, is not going to happen. That was announced by a source, familiar to one of the parties. So, the largest deal, scheduled in the power energy sector will not be made. That once again confirms out negative view over the KES Holding (TGK-5, TGK-6, TGK-7, TGK-9).

Trader’s view

Today we expect the Russian market to open with mild growth. Investors will be supported by upping futures for the American indices and positive trade dynamics at Asian grounds. The key event today – FED session on money policy. It is not expected to bring any surprises. We do not expect the market to add significantly until the end of the month.

News briefly

Energy: Net profit of Bashkirenergo by IAS in 2011 added 25% versus the 2010 forming 3,409 mn RUR (106 mn USD). Company’s sales reduced in 2011 by 10.5% since the end of 2010 to 56,261 mn RUR (1,747 mn USD), operation profit grew 9% forming 4,386 mn RUR (136 mn USD).

Precious metals: Nord Gold reduced gold output in1Q 2012 by 11% y/y.

Precious metals: Highland Gold Mining: in 2011 EBITDA grew 30%, net profit dropped 15%.