Jpmorgan Russian Securit... Share Discussion Threads

[binladin] 06/3/2015 13:29

Ready to move up...

[binladin] 06/3/2015 10:47

Straight up rally....to 400p...

[loganair] 05/3/2015 15:12

Russian business sentiment sends market down - Strong correction yesterday. The Russian market finally corrected yesterday, as the RTS index closed down 3%. The key disappointment of the day was the extremely low level of business activity reported for February, according to Russia’s PMI data, which was published yesterday morning. The overall level of economic activity in Russia fell below 45 points, which indicates further deterioration in the economy, driven primarily by the services segment. Furthermore, the outlook and business expectations were almost as low as they were at the depths of the previous recession at the beginning of 2009.

[binladin] 05/3/2015 14:37

Should be 350p now

[loganair] 04/3/2015 10:34

Adjusted EBITDA down 37% YoY. Lukoil (LKOH RX – Buy) (JRS Largest Investment) reported 4Q14 US GAAP results. Revenues were $31.3 bln, 9% above estimate, declining 13% YoY and 20% QoQ. EBITDA, calculated as operating income plus DD&A, declined 58% YoY and 87% QoQ to $733 mln. Adjusted for asset impairment, dry-well write-offs and a number of other non-cash items, EBITDA declined 37% YoY and 47% QoQ to $2.95 bln, 31% below the consensus. The adjusted EBITDA margin narrowed by 3.5 ppt YoY and 4.7 ppt QoQ to 9.4%. Lukoil posted a net loss of $1 bln in 4Q14, primarily on non-cash impairments and write-offs.

[binladin] 03/3/2015 15:33

Peace in ukraine and russian markets will rocket...

[loganair] 03/3/2015 10:16

Recession will be relatively short … Yesterday, Economy Minister Alexei Ulyukaev said that the recession in Russia will be relatively short and that growth will most probably resume in 4Q15 or even earlier. Ulyukaev said that he expects economic activity to contract 3% this year, while real incomes will drop 6-7%. He said inflation will reach a peak of 17% YoY in April and decelerate to 11-12% YoY by year-end. Ulyukaev sees inflation sharply decelerating next year, which should bring real income growth back to positive territory. The sharp decrease in inflation will allow CBR to gradually reduce the key rate (currently 15%), which is currently excessively high.

[binladin] 26/2/2015 14:25

Ukraine army starts weapons withdrawal.....

[binladin] 25/2/2015 16:05

The Ukrainian army has said it suffered no casualties in 24 hours for the first time in weeks, raising hopes that a fragile ceasefire is starting to hold.

[binladin] 23/2/2015 13:04

Should go up now with war in ukraine stopped and double to appreciate..

[loganair] 23/2/2015 10:53

Russia cools gold reserve additions in January:

While Russia may not have added to its gold reserves in January this does not mean its gold buying spree is over – at least not yet.

The latest announcement from the Russian Central Bank shows, that after several months of continuing high levels of additions to its gold reserves last year, it made no new gold purchases in January, although it did offload a substantial volume of U.S. Treasuries from its foreign reserves in December. There had been speculation late last year that Russia would, in fact, sell some of the gold it had been accumulating (171 tonnes last year) to help protect its currency in light of U.S. and EU sanctions and the sharp drop in energy prices which had adversely impacted the nation’s exports. However, this proved not to be the case and it looks as though any transactions to help mitigate the decline in the ruble was accomplished through the sale of U.S. Treasuries. Altogether, over the whole of 2014, Russia appears to have disposed of more than $50 billion in its holdings of U.S. Treasuries to support the ruble and to buy gold. Some $22 billion of these sales was undertaken in December when the Central Bank bought 18.7 tonnes of gold worth around $7.5 billion.

Some of the same analysts are now suggesting that the adverse economic factors have thus caused Russia to cut back on its gold buying programme – but in our view it is far too early to tell. Last year, for example, Russia also bought no gold in January, nor in March, but a small amount in February

As can be seen, although Russia has been a fairly consistent gold buyer for a substantial period of time, the purchases can be erratic on a month-by-month basis so perhaps not too much should be read in the Central Bank’s absence from the market for a solitary month – at least not yet.

With the decline in its U.S. Treasuries without an increase in its gold holdings, gold probably now accounts for around 13-14% of Russia’s total foreign reserves, still far below the percentages reported to be held by Germany, Italy and France all of which hold around two-thirds of their foreign exchange reserves in gold. One suspects that President Putin, who has been decidedly pro-gold in his statements, may well continue to follow this policy of increasing the country’s gold reserves and selling U.S. Treasuries.

Russia is also now, according to the Metals Focus specialist consultancy, the world’s second largest producer of gold, after China, with annual mine production estimated at some 272 tonnes in 2014 – seizing the No.2 slot from Australia.

[loganair] 23/2/2015 10:47

Investing in Russia funds: Bullish or plain stupid? By Lauren Mason:

With a particularly frosty recession on the horizon in Russia, an investment in the emerging market has never seemed riskier. However, is there still a chance that bullish investors could stand to make a profit?

Vladimir Putin began 2012 in an extreme position of confidence. He went on to suppress opposition at home, annex Crimea and instil fear into the West. Amid this, oil was priced comfortably at around $100 a barrel for most of the period.

Who would have thought that three years later the country would be inching towards a devastating recession, following western sanctions and the plummeting rouble? Russia has been hit by persistent capital flight, an increase in inflation which has eroded household incomes and strains in the banking sector. Of course, this downward spiral will be endured with a distinct lack of allies.

While last week’s agreement on a ceasefire in Ukraine restored some temporary optimism, it already appears to be crumbling in spite of desperate attempts from France and Germany to patch things up.

Not a good time to invest in Russia, perhaps. Or is it?

Colin Croft, manager of the Jupiter Emerging European Opportunities fund, said: “For those who take a long-term view, I believe 2015 could present an opportunity to buy into quality businesses in the region with sustainable and growing yields.”

“A decade ago, companies in the region were generally reluctant to pay dividends. In some cases, this was for good reasons: many needed to reinvest profits in businesses that were doubling in size every two years.”

“In other cases, it was for less enlightened reasons that reflected serious corporate governance issues.”

Croft explains that a lot has changed in the last 10 years, however.

He added: “Many of the businesses that were then in the early stages of breakneck growth have now, in my view, matured to a stage where they can increasingly fund their expansion plans from cash flows, while paying progressively higher dividends.”

The manager gives the example of Magnit, Russia’s leading food retailer, as a stock that is looking attractive.

“This is still a company with considerable growth potential, in my view, due to the highly fragmented and under-penetrated nature of Russian food retail.”

“Although it is the largest player, it still only has a single-digit market share. I believe it has significant scope to grow at the expense of weaker rivals that cannot match its best-in-class logistics and scale advantage in purchasing power.”

Magnit began paying dividends in 2009, paying a total of approximately $18m to shareholders. In just four years, this grew exponentially to just under $300m.

What’s more, while the weakness of the rouble will provide a headwind this year, this could potentially be reversed if oil prices recover to a normal level.

Arguably a tenuous prospect to rely on, but for the strong-bellied investor there could be some light at the end of the tunnel.

The ‘light’ in question is the prospect that Putin could reform the Russian economy and patch up western relations. Historically, it has been noted that the Russian government becomes more ‘business friendly’ whenever the price of oil falls.

Nevertheless, a report released by Capital Economics this month predicts a gloomy outlook for anybody considering Russian investments.

The macroeconomic forecasting consultancy predicts that Russian GDP might fall by around 5 per cent this year. This would put the impending recession at a similar scale to the country’s 1998 recession.

Data shows that this recession was followed by a rapid return to 10 per cent growth rates within two years, which then averaged to 7 per cent over a decade.

However, before you start feeling confident, it seems that circumstances are very different now.

Capital Economics emerging markets economist William Jackson explained: “The unemployment rate is near a record low and capacity utilisation is near a record high. In other words, there is very little slack in the economy.”

“Admittedly, a steep recession this year is likely to create some spare capacity. However, it won’t be sufficient to support a period of strong growth rates for more than a year or so.”

Nevertheless, Russia could perform strongly as the market responds to long-term trade deals with countries such as China or hints of economic and political reform.

Gary Greenberg, head of emerging markets at Hermes Investment Management, said: “With the valuations of its currency and stock market, not to mention our investor sentiment towards the country, a substantial bounce this year cannot be ruled out.”

“We currently maintain a neutral exposure through investments in solid companies like Norilsk –high dividend yield – and Mail.ru – a beneficiary of an economic recovery.”

“Still, looking out over the next decade, it is difficult to see how Russia will emulate more successful emerging markets such as Taiwan and Korea, not to mention the developed economies it regards as its equals.”

While few would consider building their portfolio around Russia, investors are getting some very cheap deals. The MSCI Russia Index’s price-earnings ratio is 4.25, which is the lowest it’s been since 2001 and is cheap compared to the FTSE All Share P/E ratio of 16.49

This means that if investors embrace their bullishness and play the market right, they could potentially make a huge profit. Of course, this would have to involve playing a long waiting game and having a very strong stomach.

Croft believes that, although Eastern European markets can be volatile, they create opportunities for these types of investors when in the context of a well-diversified equity income strategy fund.

He said: “In a world where it appears that certain asset prices are being driven to unsustainably high levels by loose monetary policy, supposedly low-risk income opportunities such as western government bonds look increasingly overpriced.”

“In my view, this overpricing is transforming them into assets that are potentially riskier than one might think.”

A deep recession, a vulnerable banking sector and higher inflation are all on the horizon. What’s more, the recovery is likely to be weak in comparison to their recession in 1998. Any short-term or even medium-term investments are unlikely to reap rewards.

Capital Economics' Jackson said: “So is Russia doomed? In one word, yes. We expect a deep recession this year, accompanied by higher inflation and tighter monetary policy than most expect. The banking sector will remain a key source of vulnerability – a severe credit crunch looks likely and the government will need to expand its recapitalisation plan significantly. ”

“What’s more, unlike in 1998, the subsequent recovery is likely to be disappointingly weak. Indeed, we expect growth over the rest of this decade to be similar to that seen during the Brezhnev stagnation. ”

“The only way to avoid this outcome would be if Russia were to take steps to bring the conflict in Ukraine to an end while making wholesale reforms at home to improve the business environment. But the politics means it’s nigh on impossible to see this happening. ”

However, as some investors believe, those with resilient and willing to wait could find that buying in during such stressed times means decent gains over the long term.

[loganair] 23/2/2015 10:40

Investing in Russia funds: Bullish or plain stupid? By Lauren Mason:

With a particularly frosty recession on the horizon in Russia, an investment in the emerging market has never seemed riskier. However, is there still a chance that bullish investors could stand to make a profit?

Vladimir Putin began 2012 in an extreme position of confidence. He went on to suppress opposition at home, annex Crimea and instil fear into the West. Amid this, oil was priced comfortably at around $100 a barrel for most of the period.

Who would have thought that three years later the country would be inching towards a devastating recession, following western sanctions and the plummeting rouble? Russia has been hit by persistent capital flight, an increase in inflation which has eroded household incomes and strains in the banking sector. Of course, this downward spiral will be endured with a distinct lack of allies.

While last week’s agreement on a ceasefire in Ukraine restored some temporary optimism, it already appears to be crumbling in spite of desperate attempts from France and Germany to patch things up.

Not a good time to invest in Russia, perhaps. Or is it?

Colin Croft, manager of the Jupiter Emerging European Opportunities fund, said: “For those who take a long-term view, I believe 2015 could present an opportunity to buy into quality businesses in the region with sustainable and growing yields.”

“A decade ago, companies in the region were generally reluctant to pay dividends. In some cases, this was for good reasons: many needed to reinvest profits in businesses that were doubling in size every two years.”

“In other cases, it was for less enlightened reasons that reflected serious corporate governance issues.”

Croft explains that a lot has changed in the last 10 years, however.

He added: “Many of the businesses that were then in the early stages of breakneck growth have now, in my view, matured to a stage where they can increasingly fund their expansion plans from cash flows, while paying progressively higher dividends.”

The manager gives the example of Magnit, Russia’s leading food retailer, as a stock that is looking attractive.

“This is still a company with considerable growth potential, in my view, due to the highly fragmented and under-penetrated nature of Russian food retail.”

“Although it is the largest player, it still only has a single-digit market share. I believe it has significant scope to grow at the expense of weaker rivals that cannot match its best-in-class logistics and scale advantage in purchasing power.”

Magnit began paying dividends in 2009, paying a total of approximately $18m to shareholders. In just four years, this grew exponentially to just under $300m.

What’s more, while the weakness of the rouble will provide a headwind this year, this could potentially be reversed if oil prices recover to a normal level.

Arguably a tenuous prospect to rely on, but for the strong-bellied investor there could be some light at the end of the tunnel.

The ‘light’ in question is the prospect that Putin could reform the Russian economy and patch up western relations. Historically, it has been noted that the Russian government becomes more ‘business friendly’ whenever the price of oil falls.

Nevertheless, a report released by Capital Economics this month predicts a gloomy outlook for anybody considering Russian investments.

The macroeconomic forecasting consultancy predicts that Russian GDP might fall by around 5 per cent this year. This would put the impending recession at a similar scale to the country’s 1998 recession.

Data shows that this recession was followed by a rapid return to 10 per cent growth rates within two years, which then averaged to 7 per cent over a decade.

However, before you start feeling confident, it seems that circumstances are very different now.

Capital Economics emerging markets economist William Jackson explained: “The unemployment rate is near a record low and capacity utilisation is near a record high. In other words, there is very little slack in the economy.”

“Admittedly, a steep recession this year is likely to create some spare capacity. However, it won’t be sufficient to support a period of strong growth rates for more than a year or so.”

Nevertheless, Russia could perform strongly as the market responds to long-term trade deals with countries such as China or hints of economic and political reform.

Gary Greenberg, head of emerging markets at Hermes Investment Management, said: “With the valuations of its currency and stock market, not to mention our investor sentiment towards the country, a substantial bounce this year cannot be ruled out.”

“We currently maintain a neutral exposure through investments in solid companies like Norilsk –high dividend yield – and Mail.ru – a beneficiary of an economic recovery.”

“Still, looking out over the next decade, it is difficult to see how Russia will emulate more successful emerging markets such as Taiwan and Korea, not to mention the developed economies it regards as its equals.”

While few would consider building their portfolio around Russia, investors are getting some very cheap deals. The MSCI Russia Index’s price-earnings ratio is 4.25, which is the lowest it’s been since 2001 and is cheap compared to the FTSE All Share P/E ratio of 16.49

This means that if investors embrace their bullishness and play the market right, they could potentially make a huge profit. Of course, this would have to involve playing a long waiting game and having a very strong stomach.

Croft believes that, although Eastern European markets can be volatile, they create opportunities for these types of investors when in the context of a well-diversified equity income strategy fund.

He said: “In a world where it appears that certain asset prices are being driven to unsustainably high levels by loose monetary policy, supposedly low-risk income opportunities such as western government bonds look increasingly overpriced.”

“In my view, this overpricing is transforming them into assets that are potentially riskier than one might think.”

A deep recession, a vulnerable banking sector and higher inflation are all on the horizon. What’s more, the recovery is likely to be weak in comparison to their recession in 1998. Any short-term or even medium-term investments are unlikely to reap rewards.

Capital Economics' Jackson said: “So is Russia doomed? In one word, yes. We expect a deep recession this year, accompanied by higher inflation and tighter monetary policy than most expect. The banking sector will remain a key source of vulnerability – a severe credit crunch looks likely and the government will need to expand its recapitalisation plan significantly. ”

“What’s more, unlike in 1998, the subsequent recovery is likely to be disappointingly weak. Indeed, we expect growth over the rest of this decade to be similar to that seen during the Brezhnev stagnation. ”

“The only way to avoid this outcome would be if Russia were to take steps to bring the conflict in Ukraine to an end while making wholesale reforms at home to improve the business environment. But the politics means it’s nigh on impossible to see this happening. ”

However, as some investors believe, those with resilient and willing to wait could find that buying in during such stressed times means decent gains over the long term.

[loganair] 19/2/2015 13:14

Foreigners Visiting Russia Required to Submit Detailed Travel Plans:

Foreigners planning to travel to Russia will have to provide detailed itineraries along with their visa applications as of Monday 2nd February, according to the country's Association of Tour Operators.

Travelers will now be required to list all cities and towns they intend to visit in Russia, along with information about their Russian hosts or visa sponsors, the Interfax news agency reported Monday, citing the tour operators' association.

Tourists will also be required to submit the address of a migration service office where they intend to register as a visitor, the report said. The new rules were introduced by the Federal Migration Service and are mandatory for all visitors, regardless of their visa type.

"This isn't great for the country's image among tourists," the tour association's deputy chief, Vladimir Kantorovich, was quoted as saying Friday by the Rossiiskaya Gazeta newspaper. "It is annoying when you have to answer too many questions on a form, and the wish to visit such countries disappears."

Additionally, many foreign tourists do not have a detailed itinerary prepared in advance and plan to modify their travel plans as they go along, Kantorovich said.

[loganair] 17/2/2015 10:48

Claim against Ural-Invest upheld by Moscow Arbitration Court. Yesterday the Moscow Arbitration Court ruled in favor of AFK Sistema (SSA LI – Not Rated) in its case against Ural-Invest, the seller from which the former bought shares of Bashneft from back in 2009, Interfax reported yesterday. Sistema was awarded RUB70.7 bln ($1.1 bln) in damages. According to representatives of the defendant, the decision will be appealed. However, in our view, there is a high likelihood that the ruling will ultimately be upheld.

Before dropping out of bed, Sistema used to be JRS 8th Largest Investment dropping in monetary terms to one of their smallest investments. JRS still hold on to their Sistema shares and any good news will see these shares rise rapidly.

Over the past month Sistema's share price has doubled and can easily have a lot further to go.

[loganair] 16/2/2015 11:14

Russian assets rally, supported by oil, Ukraine hopes. On Friday the Russian market closed on a positive note on hopes the ceasefire in Donbass will hold. The higher oil prices also contributed significantly to the positive sentiment. All Russian assets strengthened, the ruble rallied and the RTS index closed with an impressive 6% gain.

Bonnard - JRS hold around 0.6% of Highland Gold Mining.

[loganair] 16/2/2015 11:14

Russian assets rally, supported by oil, Ukraine hopes. On Friday the Russian market closed on a positive note on hopes the ceasefire in Donbass will hold. The higher oil prices also contributed significantly to the positive sentiment. All Russian assets strengthened, the ruble rallied and the RTS index closed with an impressive 6% gain.

[loganair] 16/2/2015 11:02

Even after nearly a year of sanctions, many Russian companies are still growing and double digit growth rates.


Sales growth strong in January - Sales rise 30.7% YoY, led by Dixy neighbourhood stores. Dixy Group (JRS 12th Largest Investment) published a strong trading update for January on Friday. Consolidated revenues increased 30.7% YoY to RUB20.4 bln ($329 mln). Dixy neighbourhood stores again grew the fastest, with sales increasing 34.5% YoY to RUB16.3 bln ($263 mln) which was faster than sales at Magnit’s core network. Victoria division’s sales rose 19.4% YoY to RUB2.7 bln ($44 mln) and revenues at the MegaMart division grew 14.4% YoY to RUB1.4 bln ($23 mln).

[loganair] 14/2/2015 14:00

I am beginning to look at reducing my monthly investment in JRS, switiching it to JPB (JP Morgan Brazilian Investment Trust).

Currently my monthly investment is 80% JRS and 20% JPB, I'm looking at going to half and half, 50% into each.

Brazil is in crisis and Yes, the short-term position is dire but I’m a medium- to long-term investor and over that time frame Brazil looks alright. When Brazil is this cheap, it’s time to get off the sidelines.

[binladin] 13/2/2015 11:44

The ruble was stronger on Friday and Russian shares rose, helped by a peace agreement to end the war in Ukraine and a rise in oil prices to $60 per barrel.

[loganair] 13/2/2015 10:42

Western Route to be discussed again in Beijing. Gazprom’s (GAZP RX – Hold) (JRS 10th Largest Investment) CEO Alexei Miller flew to Beijing yesterday for another round of talks on the 30-bcm per annum Western Route pipeline to China. Gazprom expects to sign a final contract on the Western Route this year. Meanwhile, preliminary work on the Eastern Route (the Power of Siberia pipeline), which should be launched in 2019, continues on schedule.

[binladin] 12/2/2015 13:04

Roadmap for peace in ukraaine will see Russia stocks and the ruble reach new peak. Should go to 600p near term target...should get to 350 today..directors buying......5000 shares shows confidence..