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RMG - Weekly, Feb 6 -10, 2012, MACRO INDICATORS AND POLITICS.

EWS & OUTLOOK- 2

TORIES TO WATCH (NEW) - 3

OP BUY-SELL - 5

ACROECONOMIC INDICATORS - 7

ARKET STATISTICS - 8

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Russian stocks saw a modest correction last week after two months of uninterrupted gains. Ruble appreciationagainst the dollar (by 0.5%) meant the RTS Index was less affected, falling only 1.4% w-o-w compared with 2.6% decline by the ruble-denominated MICEX. Profit taking was sparked by populist gestures ahead of presidentialelections: the premier (and presidential candidate) Vladimir Putin raised the possibility of a levy on beneficiaries of major privatization deals in the 1990s and state-owned VTB said that it will buy back shares from minorities whobought them in the apeople's IPOa of 2007 at the original placement price (twice higher than current marketquotes).

Falls by main indexes contrasted with gains in second-tier stocks (including Rosinter, Protek, Open Investments,Sollers, MRSKs, etc.). The RTS-2 Index of second-tiers surged by 5.9% w-o-w as more interest switched on them.

Global markets remained fixed on the Greek saga. Eurozone ministers again failed to approve financial aid for thecountry, so that main indexes ended the week on a minor note (S&P500 -0.2%, DAX100 -1.1%). But at the weekend the Greek parliament voted to accept a reform package, which is the condition of aid, giving hope for a positive EU decision on February 15.

Economic fundamentals remained positive. Oil prices unexpectedly broke out of a protracted corridor: Brent gained2.4% to reach $120 per barrel on Thursday and Urals prices were even stronger(+3.6%) due to the Iranian oil embargo (supplies to Europe have been substituted by Russian oil) and an extreme cold spell in Europe. Prices forindustrial metals were almost unchanged.

This week could be decisive for Greece. EU ministers must approve newloans to the county when they meet on Wednesday, or there will be insufficient time to arrange restructuring terms before March 20, when Greece is dueto make large debt payments. Acceptance of the austerity package by the Greek parliament makes a positive EU decision likely, so markets have a strong driver in the next couple of days.

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Rye, Man & Gor Securities

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Publication:Russian Banks and Brokers Reports
Date:Feb 14, 2012
Words:411
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