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Veles Capital - Daily review -Jul 11, 2013.

Trader's view

Investors took the released FED's report positively, and the report accompanied with high oil prices will turn into key

drivers of Thursday trade. Positive dynamics of the course of trade in Asia will just be supporting growth of the major indices at the Russian ground.

(To view the full report please click here:

http://reports.aiidatapro.com/brokers/VelesEN/130711eng.pdf)

Main events

Gazprom indicated increase of gas export for June to Europe by 28.7% vs June 2012.

For FY results Gazprom expects export to grow up to 160 bn cubic m (vs the 151 bn cubic m last year). We assume that

reaching given targets of export volume to Europe is possible only in case the European economy starts recovering in 3-4Q.

Authorities of China might introduce new limits on selling cars.

Resulting from the demand reduction for cars, the situation in the China's ferrous metallurgy might get bad too as it already suffers from excessive volume of steel-smelting capacities. Magnit has executed 38% of its plan of chain development announced early this year.

The news definitely will reflect on the investors' attitude. Rosneftegas will be the basis for consolidation of Inter RAO's

shares.

Given news might be a signal for speculative buying, due to that the shares rate might increase. However, we should wait and see the way the situation develops. In case the minority gets an offer, Norilsk Nickel might benefit from that, same as the other minorities as the shares' rates increase.

Trader's view

Italy and China are responsible for today's drop of the Russian shares. Italy's rating downgrade was another signal that Europe has unsolved problems, particularly such as presence of debtors. Reduction of import and export in China did not bring positive to the global markets. Drop of export in China might indicate the slowdown of growth of the largest consumers of Chinese goods, U.S. particularly. Reduction of import of China might indicate deceleration of the Chinese economy growth rates, which will be followed by lower buying of metal products and oil, which might directly reflect on the Russian metal companies. Stats on the reserves of oil and oil products in the U.S. turned out to be positive: reserves of the oil reduced 9.8 mn barrels while the market guided reduction by 3.2 bn barrels, reserve of motor fuel also reduced

2.6 bn barrels, better than expected. Consequently, the oil prices got close to 108 USD per barrel, which is an optimistic indicator for the Russian market. FED's minutes provided no news to the market.Bernanke confirmed his intention to continue stimulation policy in the U.S.

Investors took the released FED's report positively, and the report accompanied with high oil prices will turn into key drivers of Thursday trade. Positive dynamics of the course of trade in Asia will just be supporting growth of the major indices at the Russian ground.

Trade results (table)

****

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For further information please contact: VelesCapital, Russia, Moscow,

123610, Krasnopresnenskaya nab. 12, Entr. 7, floor 18

Tel.: 7 (495) 258 1988, Fax: 7 (495) 258 1989,

e-mail: research@veles-capital.ru, web: http://www.veles-capital.ru
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Publication:Russian Banks and Brokers Reports
Geographic Code:4EXRU
Date:Jul 11, 2013
Words:529
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