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[loganair] 25/11/2014 09:36

Russian food retailer Dixy Group (JRS 12th Largest Investment) said on Monday its third-quarter net profit rose 90.4 percent year-on-year to 1.2 billion roubles ($27 million).

Revenue grew 31 percent to 58 billion roubles and earnings before interest, taxation, depreciation and amortisation rose 56 percent to 4.3 billion roubles, Dixy said in a statement. (1 US dollar = 44.5020 Russian rouble)

[loganair] 24/11/2014 20:41

Russia’s central bank will be feeling vindicated in its decision to press ahead with a free float in the rouble, after a week in which the currency’s prolonged slide has apparently bottomed out.

The currency, which has lost more than a quarter of its value against the dollar since the start of the year, fluctuated wildly after the central bank announced this month that it was ending its daily interventions in foreign exchange markets. The policy – intended to smooth swings in the exchange rate – had ended up draining billions each week from foreign exchange reserves and became a target for speculators.

In the past week, however, the currency has stabilised, gaining around 5 per cent against the dollar. That recovery accelerated on Monday, when the rouble jumped 2 per cent to trade at Rbs44.8050 against the greenback.

The comeback was triggered by hints last week that Russia could cut back its supply of oil to the global market, and sustained by speculation that Opec nations could agree to cuts in oil production when they meet at the end of this week.

The rouble has also gained on the back of China’s unexpected cut in interest rates, which has boosted the currencies of emerging markets and commodity producers.

But Tom Levinson, currency strategist at Sberbank, said the currency’s relative stability also suggested the central bank was winning in its battle against speculators: shorting the currency is no longer a one-way bet.

Rouble Shorts - For the second week running, hedge funds and other speculators pared bets the rouble will weaken versus the dollar, with net short positions cut to 3,605 on Nov. 18 from 4,082 on Nov. 11, according to Commodity Futures Trading Commission data.

Now, Russian exporters – who must convert overseas earnings into roubles at the end of each month to pay taxes – are rushing to lock in a favourable exchange rate before the rouble appreciates further. A survey released last week by a state-run agency also suggests that households, although worried about the exchange rate eroding their savings, are not rushing to convert them into dollars as some did earlier in the year.

[loganair] 23/11/2014 14:05

Magnit (JRS Largest Investment) has improved its FY sales growth (in rouble terms) and EBITDA margin guidance based on nine-month sales.

It now expected FY sales growth in roubes of 31-32%, from a range of 26-29% given in July. EBITDA margin was now seen in the band 11.2-11.4%, from the 10.6-10.9% range forecast in July.

[loganair] 23/11/2014 13:17

Does the US really want oil prices to fall any further.

Several US states that are overly dependent on oil to meet their budget forecasts are up for a big disappointment. They're experiencing the challenge of budget woes as a fall in oil prices could pose serious consequences for their economies.

Officials from several states, namely Texas, Alaska, Louisiana, New Mexico, North Dakota, and Oklahoma, scrambling to make the math work. Alaska in particular will see a gaping hole between what it forecasted for revenue collections and what it will ultimately be able to collect. That is because it relies on oil taxes to meet 89 percent of it.

Even worse, some states were much more optimistic about oil prices than others, setting their budgets up for a big disappointment. For example, Alaska’s budget assumed that the WTI oil price would average $106.61 per barrel for the year, and $105 next year. With actual prices way off from that, Alaska may need to make some dramatic revisions to its spending plans collections.

Louisiana is selling more debt in order to cover the unexpected shortfall. It offered $200 million in bonds, enough to cover a mid-November revision of its lower-than-expected budget revenue. The state is expected to take in $171 million less than originally projected through June 2015.

New Mexico is also in the line of fire. It may take in $100 million less than anticipated.

[loganair] 23/11/2014 13:00

Saudi Arabian oil break even is around $8 per barrel while US shale oil needs around $64 to break even just to get out of the ground. However many of the US shale oil companies have huge debts and at the current level of oil price ($80 per barrel) are barely able to pay the interest on their debts due to their high-yield bond leverage.

Also I've been reading over the past couple of months that the amount of shale gas/oil reserves in the US are nearly 50%, half of what they were first thought to be 2 years ago while some countries who at first reported they had substantial reserves are now saying they do not really have any recoverable reserves of shale oil.

Deutsche Bank research see almost 40pc of US shale oil wells are unprofitable if Brent continued to trade at its currently depressed levels ($80 per barrel) for a prolonged period of time.

At $70 per barrel this number rises to around 80% of US shale oil wells become unprofitable.

Shale oil producers in Texas and North Dakota are already cutting rig counts.

[jeff h] 23/11/2014 12:41

Here's a piece on oil prices loganair:-

[loganair] 23/11/2014 12:05

If ever I have a few pounds in my pocket I'm also picking up as many Roubles as I can as when the oil price rebounds and the crises in Ukraine starts to ease and therefore sanctions against Russian begin to be lifted I can see the Rouble strengthening against the pound and other currencies.

Mind you the strengthening I'm not talking about short term, the next 6 months, I'm looking more medium term.

[loganair] 23/11/2014 11:19

If Russia keeps buying gold at the rate she is, then every 2 years Russia accumulates as much Gold as the UK's total Gold Reserves.

In contrast Ukraine slashed its gold reserves by more than a third in October, data from the International Monetary Fund showed. Ukraine ended last month with 26 tons of gold, down by 14 tons from September.

More selling by Ukraine, or any other central bank, could hurt gold prices, which earlier this month sank to 4-1/2-year lows following a sell-off that began in late October. Gold is extremely sensitive to buying and selling by central banks — the biggest holders of bullion.

[loganair] 21/11/2014 14:09

The latest announcement from the Russian Central Bank shows that the nation is still accumulating gold at a high level. Total gold reserves according to figures compiled by Nick Laird of www.sharelynx.com have now reached 1,169 tonnes having been expanded by a further 18.7 tonnes in October.

There is something of an anomaly though in the Russian figures. Earlier in the week the Russian Central Bank governor, Elvira Nabiullina, told the world that the nation had accumulated 150 tonnes of gold so far this year – but the latest announced figures leave it some 16.5 tonnes short of this figure – unless of course, the bank has already purchased this amount of gold on the markets since the beginning of the current month – certainly possible given its recent month by month accumulations.

Gold currently constitutes for around 10% of the Russian Central Bank’s gold and forex reserves. Official purchases were about 77 tons in 2013, International Monetary Fund data show.

Russian President Vladimir Putin is a firm believer in gold and the position it may give Russia in any future re-alignment of the global reserve currency in the years ahead. It is also almost certainly part of a move to diversify the nation’s foreign reserves away from the US dollar – it has huge oil and gas revenues which enable it to do this despite the adverse impact of economic sanctions on the domestic economy. The way things are moving politically, President Putin is working to further disassociate the economy and trade from dollar reliance, as witness moves to hugely increase trade with China – not least through gas and oil exports – and also to set up a counter to the SWIFT interbank trading system in case the US manages to cut it off from using the current system, although there is no sign of this happening as yet.

What should perhaps be disturbing to the West is that once the new gas pipelines into China are up and running then the reliance on gas sales to Europe for the nation’s economy become less significant giving the Kremlin a potentially devastating economic weapon which it could use if political factors deteriorate further. European nations dependent on Russian gas supplies for much of their power are already expressing concerns over sanctions. Putin plays a long game and gold could become part of his economic equation – and a Russia-China axis, which seems to be developing, could be a strong counter to US economic dominance long term.

[loganair] 21/11/2014 14:08

The latest announcement from the Russian Central Bank shows that the nation is still accumulating gold at a high level. Total gold reserves according to figures compiled by Nick Laird of www.sharelynx.com have now reached 1,169 tonnes having been expanded by a further 18.7 tonnes in October.

There is something of an anomaly though in the Russian figures. Earlier in the week the Russian Central Bank governor, Elvira Nabiullina, told the world that the nation had accumulated 150 tonnes of gold so far this year – but the latest announced figures leave it some 16.5 tonnes short of this figure – unless of course, the bank has already purchased this amount of gold on the markets since the beginning of the current month – certainly possible given its recent month by month accumulations.

Gold currently constitutes for around 10% of the Russian Central Bank’s gold and forex reserves. Official purchases were about 77 tons in 2013, International Monetary Fund data show.

Russian President Vladimir Putin is a firm believer in gold and the position it may give Russia in any future re-alignment of the global reserve currency in the years ahead. It is also almost certainly part of a move to diversify the nation’s foreign reserves away from the US dollar – it has huge oil and gas revenues which enable it to do this despite the adverse impact of economic sanctions on the domestic economy. The way things are moving politically, President Putin is working to further disassociate the economy and trade from dollar reliance, as witness moves to hugely increase trade with China – not least through gas and oil exports – and also to set up a counter to the SWIFT interbank trading system in case the US manages to cut it off from using the current system, although there is no sign of this happening as yet.

What should perhaps be disturbing to the West is that once the new gas pipelines into China are up and running then the reliance on gas sales to Europe for the nation’s economy become less significant giving the Kremlin a potentially devastating economic weapon which it could use if political factors deteriorate further. European nations dependent on Russian gas supplies for much of their power are already expressing concerns over sanctions. Putin plays a long game and gold could become part of his economic equation – and a Russia-China axis, which seems to be developing, could be a strong counter to US economic dominance long term.

[loganair] 20/11/2014 12:59

MegaFon (JRS 7th Largest Investment), Huawei announce plans to deploy 5G network in Russia by 2018:

MegaFon explained that by being directly involved with the rollout of a 5G network in Russia, it could develop a standard for the technology that was reflective of the technical requirements of both the region’s telco market and physical landscape.

Mikhail Dubin, Executive Director of Consumer Business at MegaFon, commented: “MegaFon’;s strategic priority is technological leadership, so we will continue develop and roll out new technologies to provide the best quality for our customers. Thanks to our agreements, Russia will be some of the first countries to enjoy next generation mobile telecommunications.”

He commented: “The communication boundaries between humans and machines shall be broken by 5G. We are confident of turning a science-fiction-like service into 5G reality for citizens in Russia and soccer fans around the world, two years ahead of the industry’s estimated 5G introduction date of 2020.”

It said the commercial operation of 5G telecom services is estimated to provide 1,000 times more capacity than current mobile broadband networks.

[loganair] 20/11/2014 12:58

MegaFon (JRS 7th Largest Investment), Huawei announce plans to deploy 5G network in Russia by 2018:

MegaFon explained that by being directly involved with the rollout of a 5G network in Russia, it could develop a standard for the technology that was reflective of the technical requirements of both the region’s telco market and physical landscape.

Mikhail Dubin, Executive Director of Consumer Business at MegaFon, commented: “MegaFon’;s strategic priority is technological leadership, so we will continue develop and roll out new technologies to provide the best quality for our customers. Thanks to our agreements, Russia will be some of the first countries to enjoy next generation mobile telecommunications.”

He commented: “The communication boundaries between humans and machines shall be broken by 5G. We are confident of turning a science-fiction-like service into 5G reality for citizens in Russia and soccer fans around the world, two years ahead of the industry’s estimated 5G introduction date of 2020.”

It said the commercial operation of 5G telecom services is estimated to provide 1,000 times more capacity than current mobile broadband networks.

[loganair] 20/11/2014 08:27

Moscow Exchange beats expectations on interest earned and costs - Depositary operations and forex trading among fastest-growing fee sources. Moscow Exchange (JRS 8th Largest Investment) published 3Q14 IFRS results yesterday. EBITDA and net income beat the consensus by 13% and 14%. Fee income rose 2% QoQ in line with the consensus and grew 14% YoY compared to only 10% growth in total trading volumes. Depositary fees and information services were the fastest-growing segments, adding about 40% YoY; forex fees increased 33% YoY compared to trading volume growth of 44% YoY in 9M14, while equity fees added 23% YoY versus 19% growth in trading volumes. In contrast, bonds and derivative fees contracted 29% YoY and 6% YoY.

[loganair] 19/11/2014 09:25

FABIUS - Russian companies are still highly profitable and growing, the Government budget is still well into surplus. I feel the RCB (Russian Central Bank) letting the rouble to go fully free floating (which has since strengthen by some 5%) means far less profits to be made by the speculators and therefore have moved on like a pack of wild dogs to their next victim.


'The RTS managed to gain 1.7% yesterday on a strengthening rouble. The rouble dropped below RUB47/$.'

[fabius1] 19/11/2014 01:19

Seems to be holding up better than I expected.

[loganair] 18/11/2014 11:33

Rouble remains key driver for Russian assets. The Russian equity market again confirmed how uncorrelated it has become with global stock sentiment. The RTS index rose a marginal 0.1%, driven by the metals & mining (up 1%) and oil & gas sectors (up 0.8%). The strengthening rouble was partially behind the positive performance of Russia assets: banks showed very low interest in long-term foreign exchange swaps, which implies that there is little interest in avoiding roubles at this stage. The the MSCI EM index closed with a 0.5% loss.

[loganair] 18/11/2014 11:32

Rouble remains key driver for Russian assets. The Russian equity market again confirmed how uncorrelated it has become with global stock sentiment. The RTS index rose a marginal 0.1%, driven by the metals & mining (up 1%) and oil & gas sectors (up 0.8%). The strengthening rouble was partially behind the positive performance of Russia assets: banks showed very low interest in long-term foreign exchange swaps, which implies that there is little interest in avoiding roubles at this stage. The the MSCI EM index closed with a 0.5% loss.

[loganair] 16/11/2014 17:06

Morgan Stanley assessed that speculators were largely behind the pressure on the rouble. But there were also suggestions that the Russian public had begun to lose faith in its currency. VTB, Russia’s second largest state controlled bank, reported that “the key pressure on the rouble is most likely now primarily from households”. Media sources suggested that large queues formed at some banks on Friday, and there were reports that smaller branches ran out of dollars.

A key advantage of a floating rouble is that it will also allow Russia to protect its reserves at times of currency turbulence: the CBR has used $80 billion in reserves since the start of the year trying to prop up the rouble.

[loganair] 16/11/2014 17:05

Morgan Stanley assessed that speculators were largely behind the pressure on the rouble. But there were also suggestions that the Russian public had begun to lose faith in its currency. VTB, Russia’s second largest state controlled bank, reported that “the key pressure on the rouble is most likely now primarily from households”. Media sources suggested that large queues formed at some banks on Friday, and there were reports that smaller branches ran out of dollars.

A key advantage of a floating rouble is that it will also allow Russia to protect its reserves at times of currency turbulence: the CBR has used $80 billion in reserves since the start of the year trying to prop up the rouble.

[lak342] 15/11/2014 17:47

Spread Betting and CFDs Nov Magazine now online: This month's is an SBM Oil Special Edition - Check it out here and help us spread the word!

[traderabc] 15/11/2014 11:48

Apple Now Worth More Than Entire Russian Stock Market

[loganair] 14/11/2014 08:03

Sales up 29% YoY in October. Dixy Group (JRS 10th Largest Investment) yesterday released a strong October trading update. Revenue increased 29.5% YoY (up 1.2 ppt MoM) to RUB19.5 bln ($476 mln). Growth was driven by the strong performance of Dixy division where sales rose 33.7% YoY to RUB15.5 bln ($381 mln). In the Victoria division, sales rose 18.0% YoY to RUB2.5 bln ($62 mln), while Megamart only posted 10.4% YoY revenue growth to RUB1.4 bln ($34 mln).

[loganair] 13/11/2014 20:27

Taking advantage of the lowest gold prices in four years Russia purchased 55 metric tons of gold in the third quarter of 2014 to strengthen its Central Bank, London's World Gold Council reported.

Analysts see this as a sign the Russian economy is reducing its dependence on the dollar and the euro, which make up the lion's share of the country's gold and forex reserves.

"Central banks do not accumulate gold for no reason; you hold gold as part of your reserves to guard against these worst case scenarios," said Nic Brown of the French investment firm Natixis. "It would make sense that in a situation in which the Russians found their dollar reserves were no longer useful, for whatever reason, they would want to use alternatives, and the country has accumulated a large amount of gold in recent years."

[loganair] 13/11/2014 20:20

Taking advantage of the lowest gold prices in four years Russia purchased 55 metric tons of gold in the third quarter of 2014 to strengthen its Central Bank, London's World Gold Council reported.

Analysts see this as a sign the Russian economy is reducing its dependence on the dollar and the euro, which make up the lion's share of the country's gold and forex reserves.

"Central banks do not accumulate gold for no reason; you hold gold as part of your reserves to guard against these worst case scenarios," said Nic Brown of the French investment firm Natixis. "It would make sense that in a situation in which the Russians found their dollar reserves were no longer useful, for whatever reason, they would want to use alternatives, and the country has accumulated a large amount of gold in recent years."