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UFS Investment Company - Daily Stock Market Review, Mar 7, 2013.

Market Situation

According to the final estimate, the Eurozone GDP in Q4 2012 contracted, as expected earlier, by 0.6% q/q and 0.9% y/y.

In the US MBA Mortgage Applications grew by 14.8% during last week, while in the prior week the indicator changed -3.8%.

The number of employed decreased by 17,000 to 198,000, whereas it was expected to increase by 170,000.

The US Factory Orders fell 2.0% in January against the expected 2.2% decline.

Bejing announced intentions to reform the national monetary system to make the yuan more flexible.

(To view the original document, please click on the link below:

http://reports.aiidatapro.com/brokers/UFSen/UFS-130307-eng.pdf)

Comments

Vimpelcom: Expectable Results (Neutral)

CTC Media: Upbeat Results and Good Dividends (Moderately Positive)

TMK: Expectably Unimpressive Results (Neutral)

Mechel: Increasing Interest in East Coal Projects (Moderately Positive)

Key Statistics Today

EC President J. Barroso's Speech (14:30);

Germany's Industrial Orders (15:00);

Bank of England Rate Decision (16:00);

ECB Key Rate Decision (16:45);

ECB Head M. Draghi Press-Conference (17:30);

US Trade Balance (17:30);

US Initial Jobless Claims (17:30).

Corporate Events Today

Sberbank Reports RAS Results for February 2013;

Gazprom Board of Directors Meeting;

LUKOIL Releases US GAAP Financial Result for 2012;

Moscow Exchange Increases the Number of Razgulay and Lenenergo Shares As Their Codes Have been Annulled.

Market Situation

According to the final estimate, the Eurozone GDP in Q4 2012 contracted, as expected earlier, by 0.6% q/q and 0.9% y/y. In Q3 2012 GDP changed -0.1% q/q and -0.6% y/y. The last quarter 2012 proved extremely disappointing for all world's leading economies, which again intensified investors' concerns over global economic development.

In the US MBA Mortgage Applications grew by 14.8% during last week, while in the prior week the indicator changed -3.8%. ADP Employment Report showed that in February, according to revised data, the number of employed decreased by 17,000 to 198,000, whereas it was expected to increase by 170,000 in the second month 2013. The US Factory Orders fell 2.0% in January against the expected 2.2% decline; in the previous month, as shown by corrected data, the number of factory orders increased 1.3%.

Bejing announced intentions to reform the national monetary system to make the yuan more flexible, and the People's Bank of China is going to retain the currency at the current value level. The regulator is looking to cut expenses for interventions in the forex. To which extent it is accomplishable to hold the yuan at the present level amid China's rebounding economy and, accordingly, increasing demand for Chinese currency, is the open question. Overall, China's economic recovery is now due to increasing domestic consumption and accelerated realization of large domestic projects. However, in case of global economic recovery exports volumes form China will be growing, inevitably weighing on the yuan.

Even though European GDP data came as no surprise for investors, and the released figures matched expectations, market responded to this fact with a moderate decline. EUR/USD again stood below 1.3000, as the pair renewed the

prior minimum by two pips and was recorded at 1.2965. A very interesting pattern has been formed: should the pair show a marginal growth and surpass 1.3080, it will form a double bottom, which will imply growth at least to 1.3160-1.3200. the likelihood is high, as the euro weakening has sharply decelerated during the last 1.5 weeks, which may signal pending trend reversal.

Yesterday's dollar strengthening caused oil price decline. During the day Brent price decreased from $112 per barrel to the present $110.93 per barrel. Oil quotes decline will exert pressure on the Russian currency at the start of the day (30.75-30.80). However, the trend for Brent decline is unlikely to continue in the near term, so that we believe today the ruble will be moderately strengthening (30.60-30.65). USD/RUB will be ranging within 30.60-30.80 today. EUR/RUB will be trading within 39.85-40.05 rubles per euro.

External market environment is neutral, which may lead to a slight correction of the MICEX Index that settled up to 1498.02 points yesterday. We may soon see the index at 1480 points; then the growth is quite likely to recommence. S&P 500 edged up 0.11% yesterday, while the futures are now 0.08% down. Asian indices posted no common dynamics; the dollar slightly strengthened; oil prices fell.

More: http://reports.aiidatapro.com/brokers/UFSen/UFS-130307-eng.pdf

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Tel.: General: +7 (495) 781 02 02

Fax: +7 (495) 781 73 07

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Publication:Russian Banks and Brokers Reports
Date:Mar 7, 2013
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