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Veles Capital - Daily bonds review, Foreign market - Mar 4, 2013.

Foreign market

No single dynamics indicated last Friday

Eurobonds closed the week with mixed dynamics

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Domestic market

CB does not let banks recover after the tax period by cuttinglimits

Dollar is closer to 31 RUR

Ruble debt market closed the week at minor mood

Issuer's news

Rostelecom: Returns after a short break

No comments

Mosenergo upped the limit of the possible Eurobonds issue from20 to 25 bn RUR.

Svyaznoy Bank will consider the matter of placing MBa1aMBabonds on March 7.

MTS will make a decision on March 5th on placement of marke bonds.

Foreign market

No single dynamics indicated last Friday. European and American grounds closed the week with various trends under pressure of various trends. Within the daytime hours, the negative mood prevailed under pressure of the alarm about consequences of the automatic sequestration of spending in the U.S., weak data on PMI in China and political dead end in Italy. Stats on Europe were not inspiring at all. Unemployment in EZ grew to another allatime high level and formed 11.9% vs the expected 11.8%. Growth of consumer prices in annual terms reduced to 1.8%, which however gives an opportunity to expend the stimulation program.

Within the morning hours, sentiment at the market got slightly better. Consumer confidence index by Michigan university grew from 76.3 to 77.6 points, 76.5 was expected; production activity index ISM Manufacturing upped in February from 53.1 to 54.2 points.

The coming week will once again be full of various events, so volatility likely remains high. Aside the problems of spending sequestration in the U.S. and political tension in Italy, the market will feel the effect f the stats output. We assume the most effect will be made by the employment data in the U.S. (WedaFr), PMI nonamanufacturing in China (Tue) and a wide range of various stats from China that will be released in time of holidays in Russia. Note, ECB will hold its session on Thursday. Against the background of the reduction of inflation pressure and the statements of Draghi on continuation of the stimulation policy, we assume results of the session might be surprising.

European grounds reduced Friday 0.64% on Euro Stoxx index 50 and 0.43% on DAX. American grounds closed with growthof about 0.25% on Dow Jones and S&P. Yield of the Treasuries reduced 2a3 bps and formed 0.74% on UST5, 1.84% on UST10, 3.05% on UST30.

Eurobonds closed the week with mixed dynamics. For the most part of the day, the domestic loans traded near Thursday close levels. The sovereign segment was under pressure of the foreign negative but sale was not alarming. Russiaa42 lost 18 bps, going down to 116.31% of the nominal, Russiaa30 -16 bps to 124.46% of the nominal, Russiaa22 - 10 bps to 110.68% of the nominal.

We expect mild negative start of the week at the domestic currency debt market. Pressure will be made by factors of political crisis in Italy, sequestration of budget spending in the U.S. and insufficiently strong stats on Chinese economy.


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Publication:Russian Banks and Brokers Reports
Geographic Code:4EXRU
Date:Mar 4, 2013
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