vk.com/id446425943
Russia
Equities
23 November 2018
Most/Least Liked Stocks
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Name |
Ticker |
Rec |
12-mo TP |
ETR |
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Most liked |
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Sberbank |
SBER RX |
Buy |
RUB 330 |
75% |
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Inter RAO |
IRAO RX |
Buy |
RUB 8.40 |
116% |
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Nornickel |
GMKN RX |
Buy |
RUB 17,700 |
63% |
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PhosAgro |
PHOR LI |
Buy |
USD 17.00 |
38% |
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Gazprom Neft |
SIBN RX |
Hold |
USD 6.10 |
19% |
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Rosagro |
AGRO LI |
Buy |
USD 14.50 |
36% |
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Luxoft |
LXFT US |
Buy |
USD 50.00 |
52% |
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Least liked |
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Novatek |
NVTK LI |
Sell |
USD 100.00 |
-42% |
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NLMK |
NLMK LI |
Hold |
USD 23.50 |
8% |
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EVRAZ plc |
EVR LN |
Sell |
GBp 450 |
-1% |
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Top-Bottom performance, 1W, USD % |
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AFLT RX |
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+11 |
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PLZL RX |
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+8 |
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FIVE LI |
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+4.4 |
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AGRO LI |
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+4.4 |
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TCS LI |
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+4.1 |
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OKEY LI |
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+3.7 |
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POLY LN |
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+3.0 |
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GMKN RX |
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+1.8 |
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AKRN RX |
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+1.5 |
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MGNT LI |
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Strategy |
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+1.5 |
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SVAV RX |
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-4.0 |
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RTS Index |
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-0.8 |
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EPAM US |
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-3.8 |
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Equities |
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MTLR RX |
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-4.1 |
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VTBR LI |
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-4.6 |
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ETLN LI |
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-4.8 |
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SIBN RX |
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-4.8 |
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TATNp RX |
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-5 |
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POG LN |
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-6 |
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MTSS RX |
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-6 |
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EVR LN |
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-14 |
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-20 |
-10 |
0 |
10 |
20 |
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Avg. Daily Traded Volumes 1W/6M
Source: Bloomberg, VTB Capital Research
Some of the links in the document are to the
Periodical
Week Endnotes
Week #47; GMKN, AGRO and FEES TP up, HYDR and OGKB down, APEC summit
In Russia and the near abroad. The annual growth in industrial production accelerated in October to +3.7% YoY, from +2.1% YoY in September. The main reason for the visible changes in the annual growth rates was the positive calendar effect. In the meantime, we upgraded our short-term USDRUB forecasting model, revising the variable mix and its functional form, which makes our approach more flexible.
On Russian companies. During its Investor Day on Monday, Qiwi presented an upbeat view of its business prospects and profitability outlook, which creates notable upside risks to our medium-term forecasts. PhosAgro beat the Street expectations on earnings and dividends. In the meantime, we increased our 12-month Target Prices for ornickel ords and GDRs, Rusagro GDRs and FSK ords. We also decreased RusHydro ords and OGK-2 ords, Otherwise, Novatek announced the commissioning of the third Yamal LNG train. Gazprom has chosen the route for the second line of Turkish Stream and is to supply gas to Europe through Bulgaria and the Republic of Serbia starting from 2020, then through Hungary and Slovakia starting from 2021 and 2H22, respectively. The Federal Anti-Monopoly Agency has provided a draft of the tariff indexation for FSK for 2019. Moscow sees its contribution to the housing programme at RUB 602bn in 2019-21. The renovation programme and development cover 62% of the funds.
Around the globe. Global stocks and commodities were hit amid US-China tensions at the APEC summit. The UK and EU agreed a draft agreement on post-Brexit ties. Italian Deputy Prime Minister Matteo Salvini said he was open to small tweaks in the budget and a ‘polite dialogue' with the European Commission. The Philippines might reopen nine nickel mines, which could slightly improve supply in the near future. India polished diamonds net exports rose in October.
Most/Least liked stocks. Our RTS-hedged MLLS portfolio advanced +1.3% WoW. The Most Liked basket broadly hold its performance (-0.2% WoW) over this week. The Least Liked portfolio underperformed the broader market, declining -3.4% WoW.
What lies ahead. Sat: Taiwan votes. Sun: EU summit on Brexit. Mon: G-20 finance ministers; DE IFO. Wed: EIA oil inventory, US new home. Thu: FOMC minutes, Italian bond auction, EA and Turkey confidences, EU countries GDPs. Fri: G-20 Summit, EA inflation and unemployment.
Earnings season. Mon: TCS Group. Tue: Bank St. Pet, Sistema. Wed: Lukoil, Gazprom. Thu: RusHydro. Fri: Aeroflot. S&P500: 7companies. Stoxx600: 8 companies.
sources requiring paid subscriptions. |
Ilya Piterskiy, Strategist |
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Prices and market indicator values are as of |
+7 |
495 660 67 47 |
// ilya.piterskiy@vtbcapital.com |
|
Nikolay Mikheev, Strategist |
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15:00 Moscow time / 12:00 London time on |
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+7 |
495 287 68 69 |
// nikolay.mikheev@vtbcapital.com |
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Friday 23 November. All changes are from the |
Duc Nguyen, Strategist |
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close of Friday 16 November, unless stated |
+7 |
495 663 47 23 |
// duc.nguyen@vtbcapital.com |
|
otherwise.
Prices cited in the body of this report are as of the last close before, or the close on, 22 Nov 2018 (except where indicated otherwise). VTB Capital analysts update their recommendations periodically as required. This research report was prepared by the analyst(s) named above who is(are) associated with JSC VTB Capital and is distributed by JSC VTB Capital and VTB Capital PLC and their non-U.S. affiliates outside the United States. This VTB Capital research report is distributed to investors located within United States by Xtellus Capital Partners, Inc. (“Xtellus”) as a “third-party research report” as defined in Rule 2241(a)(14) and Rule 2242(a)(17) of the U.S. Financial Industry Regulatory Authority. Please refer to the Disclosures section of this report for other important disclosures, including the analyst certification and information required by regulation.
vk.com/id446425943 |
Week Endnotes |
Russia |
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Equities |
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On Markets
Global backdrop. Global stocks were rattled by US-China tensions this week. The oil rout put additional pressure on Energy stocks. The MSCI World (-2.3%) underperformed MSCI EM (-1.0%). The S&P 500 (-3.1%) was down in a shortened week, as the US took a break to celebrate Thanksgiving on Thursday. The dollar (DXY +0.4%) firmed, while the UST 10Y yield (3.05%; -1bp) inched lower. The European bourses (Stoxx 600 -1.7%, DAX -2.2%, CAC 40 -2.1%, FTSE MIB -1.3%, FTSE 100 -0.5%) turned south. The euro (-0.6%) weakened to 1.135 against the dollar. The pound (-0.1%) traded sideways amid Brexit uncertainties. The Italy 10Y yield (3.37%; -12bp) tightened as Italian Deputy Premier Matteo Salvini said he was open to small tweaks in the budget and a ‘polite dialogue’ with the European Commission. Asian benchmarks (TOPIX -0.1%, KOSPI -2.7%, Shanghai Comp -3.9%, Hang Seng -0.9%) finished in the red. Back home, Russia (RTS -0.9% / RUB +0.1%) was down, as Oil (Brent -8.6%) tumbled to USD 61.64/bbl, below the 38.2 Fibonacci retracement support level of USD 62.27. This bearish technical indicator signals further pain for crude. Back to equities, other CEEMEA markets also fell, with Turkey (BIST 100 -0.2% / TRY +0.7%) and South Africa (TOP 40 -2.3% / ZAR +0.9%) down, but Poland (WIG 20 +2.4%; PLN -0.2%) up. The South African rand rallied after the SARB hiked interest rates 25bp to 6.75% for the first time since 2016, as the central bank looks to prevent an inflation overshoot. In the commodities markets, base metals (LMEX +0.3%) rose, with Aluminium (+0.3%) and Copper (+0.8%) up, except for Nickel (-3.4%).
Russia – equities. The Russian market came to the end of week in the red. Both benchmarks, the USD-valued RTS index (-0.9%) and the RUB-valued MOEX Russia index (-1.2%) declined, broadly narrowing their MTD gains. Both of them dived below their 100D MAs. RUB (+0.1%) was flirting over the week with its 100D MA. In the meantime, the 10Y OFZ yield widened to 8.72%. As for individual names, AFLT (+11%) jumped in the absence of any fundamental news over this week. PLZL (+8%) consolidated above highs since the collapse in April. TCS (+4.6%) advanced ahead of the publication of its 3Q18 IFRS results. FIVE (+4.4%) turned north. However, we note that the stock has several times unsuccessfully tested its 100D MA. AGRO (+4.4%) expanded its gains since its earnings release to +8%, supported by the strong shortterm outlook from the Strategy Day. Among laggards, we note collapse of EVR (- 11%), which has declined -20% since its recent peak. MBT (-6%) was hit by the announced provision on potential claims. VTBR (-6%), POG (-6%) and TATNp (-5%) underperformed the broader market as well.
23 November 2018 |
2 |
vk.com/id446425943
Russia
Equities
Industrial Production – October; growth's run rate remains flat, of 19 November, by Alexander Isakov et al
Empirical Insights – USDRUB: walking away from the random walk, of 19 November, by Igor Rapokhin et al
Week Endnotes
In Russia & the Near Abroad
The annual growth in industrial production accelerated in October to +3.7% YoY, from +2.1% YoY in September. The main reason for the visible changes in the annual growth rates was the positive calendar effect in October, which strongly affected manufacturing industries that stop for weekends and holidays (i.e. the majority of them, except for metals, chemicals and petrochemicals). In September, there had been one working day less, while October was the opposite (23 vs. 22 in 2017). The run rate in October stayed roughly unchanged, at 0.3% MoM SWDA.
In this report, we develop an upgraded version of our short-term USDRUB forecasting model. We revise both the model’s variable mix and its functional form, which makes our approach more flexible. As a result, the model’s efficiency – both for scenario analysis and unconditional near-term forecasting – has increased materially. In its new form, it adapts more rapidly to FX market regime changes. We also discuss how RUB might evolve under different scenarios.
23 November 2018 |
3 |