Jpmorgan Russian Securit... Share Discussion Threads

[loganair] 21/9/2015 20:32

Russia Boosts Gold Reserves by Most in at Least Five Months by Eddie Van Der Walt:


Central bank says nation bought about 30 metric tons in August.

Bullion priced in rubles has surged 60% in past year.


Russia’s appetite for gold accelerated last month, with the country adding the most to its reserves since at least March.

The nation increased holdings to 42.4 million ounces from 41.4 million ounces in July, the central bank said on its website Friday. The amount bought was about the same as the 30.5 metric tons that Russia purchased in March, then the highest amount in six months.

“Russia has been building its holdings for a long time now for very political reasons,” Adrian Ash, head of research at BullionVault, said by phone from London. “It shows the emerging-market bid remains strong for gold, which is proving supportive.”

Russia added about 13 tons in July and 24 tons the month before that. China, Kazakhstan, Ukraine and Belarus are among other nations that have been accumulating gold.

[its the oxman] 16/9/2015 09:50

Double bottom in place. Is the worst behind us? Expecting further gradual gains.

[loganair] 11/9/2015 20:45

By Andrey Ostroukh:

MOSCOW--The Russian government acknowledged on Thursday that the country's economy is going to take longer to recover than it previously expected, weighed down by the slump in the value of the ruble.

Russia's Deputy Finance Minister Alexei Moiseyev said Thursday that the economy, also battered by a drop in oil prices and Western sanctions, will return to growth no earlier than in late 2015 or next year.

The latest forecast from the finance ministry follows a recent drop in prices for oil and gas, Russia's key exports. Oil prices have tumbled to levels not seen since March 2009 with prices of other industrial commodities on which the country is reliant, such as nickel, also on the slide. Despite calls from many quarters to diversify away from commodities, Russia has made little progress over the years.

Previously, the finance ministry said the economy might start recovering in mid-2015. Moscow's new pessimism contrasts with claims that the worst of the economic and financial crisis was over, made by President Vladimir Putin and other top officials in May when oil prices returned to nearly $70 per barrel.

Deteriorating economic indicators suggest more downside risks for the economy which shrank 4.6% in the second quarter compared with the same quarter year ago.

The end of the economic recession is nowhere in sight, said Higher School of Economics, a Moscow-based think-tank. The firm's composite leading ondicator, or CLI, fell to -4.4 in August from -3.6 in July, remaining in negative territory for the ninth month in a row.

"Dynamics of the CLI suggest that Russia's economic output will fall behind last year levels, while the weak domestic demand will be hampering the economy's return into the growth trend for a long period," HSE said in a report.

Surveys of Russian purchasing managers also showed this week that manufacturing and services sectors contracted in August, buffeted by the weak and volatile ruble.

The ruble has lost 45% of its value over the past year, amid Western sanctions, imposed after Russia's annexation of Crimea last year, and weak oil prices. In turn, these forces have curbed investment activity and dented consumer demand, while spurring inflation.

The mix of high inflation and economic recession poses a conundrum for the central bank, which is now seen leaving interest rates unchanged at its board meeting on September 11 after slashing the cost of borrowing five times so far this year.

Data showed this week, that consumer prices rose slightly in late August on a weekly basis, something of a surprise as prices usually go down in summer when supplies of fruit and vegetables are plentiful. At an annual rate, inflation is running high, up at 15.7% in August from 15.6% in July. Given all this, the Bank of Russia is unlikely to cut rates again next week, Raiffeisen bank said in a note to clients.

Mr. Moiseyev said that his ministry is waiting for oil prices to stabilize at some level for at least a few weeks before it will be able present forecast for the ruble exchange rate, which still has chances to recover in the first half of 2016.

In the afternoon trading on the Moscow exchange, the ruble weakened 0.7% to 67.56 versus the dollar, heading toward its weakest ever closing level of nearly 71 rubles per dollar hit last week.

[its the oxman] 10/9/2015 14:04

Thx loganair. Interesting times.

[its the oxman] 09/9/2015 13:26

Regards, Oxman

[its the oxman] 09/9/2015 13:25

Hi Logon, any view on success or not of Yandex ? Is it the default search engine for most Russians?

[loganair] 28/8/2015 08:45

2Q15 EBITDA grows 22% QoQ in dollars. Tatneft (TATN RX – Buy) (JRS 8th Largest Investment) published 2Q15 IFRS results yesterday. Net revenues were 2% above the consensus, rising 13% YoY and 7% QoQ to RUB142 bln ($2.7 bln). EBITDA rose 11% YoY and 3% QoQ to RUB45.8 bln ($870 mln), 3% below the consensus. In dollar terms, EBITDA fell 26% YoY and grew 22% QoQ. The EBITDA margin narrowed by 0.5 ppt YoY and 1.2 ppt QoQ to 31.7%. Net income increased 8% YoY and 11% QoQ RUB29 bln ($560 mln), 5% below consensus.

[loganair] 26/8/2015 09:05

Economy Ministry downgrades its macro forecast… Yesterday Economy Minister Alexey Ulyukaev said that the ministry has downgraded its medium-term economic outlook for Russia. The Economy Ministry now expects Russia’s economy to shrink 3.3% this year (versus 2.8% previously) and grow 1-2% in 2016. However, on the positive side, the capital investment and retail trade forecasts for this year were slightly upgraded due to the better-than-expected dynamics in 1H15. The average ruble rate for 2015 is now projected at RUB61/$ (the ruble has averaged RUB58.5/$ YTD), but next year the ruble is seen moderately strengthening due to an expected increase in the Urals price to $55/bbl from $52/bbl in 2015. The ruble should receive additional support from reduced capital outflows: outflows are now projected at $93 bln this year and $70 bln next year. Inflation is expected to remain under control, ending the year slightly above 11%.

[votiem] 25/8/2015 12:24

Excellent insight as ever from you, Logan. Thank you.

[loganair] 25/8/2015 08:15

The first thing is not to panic about the rouble exchange rate as must be kept at the equivalent of 3,600 roubles per/bbl of oil.

I am worried about Dombass in Ukraine as Lugansk is now officially using the rouble as their currency and very soon have a referendum on becoming part of Russia so expect further downward pressure of both the rouble and Russian shares.

In my good opinion Putin wants a land bridge to Crimea.

Gazprom, Russia's most valuable company is used by Putin to promote his ideas and why has fallen from being a $200bln to a $50bln company.

Long term I am still very positive Russia, short term it is becoming a bit of a basket case

Domestically, many Russian companies are still growing at 20% and their profits are also growing while maintaining very healthy margins that companies in the UK could only dream of.

The Russian Central bank seems to be pretty competent and pretty independent from Putin and the Government.

The problem with Russia is that it needs a domineering strong man at the top otherwise the oligarchs will ravage the country for their own gains like they did in the Ukraine as the Ukraine had exceedingly weak leaders.

Brazil (JPB) in my good opinion is also a good long term investment as the stockmarket is at completely Wash-out levels with a high likelihood that JPB share price could be double in 2020 to where it is today.

[votiem] 24/8/2015 22:58

Oxman?? What do you think, amigo?

[votiem] 24/8/2015 22:57

Logan - you are THE MAN on this thread. Recognising JRS brilliantly managed but Putin is stoopid and the markets spooked I'd love to know what your buy-in point might be over the next week? I think 230.

[its the oxman] 24/8/2015 12:14

All time lows?

[its the oxman] 21/8/2015 18:40

Time to pile in for the long term sub 300p

[loganair] 14/8/2015 17:21

Russian Federal budget returns to a deficit in July - The budget ran a deficit of 2.8% of GDP in 7M15. Yesterday the Finance Ministry reported that the federal budget ran a deficit of RUB1.12 tln, or 2.8% of GDP, in 7M15 and a deficit of RUB324 bln, or 5.2% of GDP, in July. The Ministry also upgraded its 1H15 deficit estimate from 2.6% to 2.3% of GDP. For comparison, in 1H14 the federal budget ran a surplus of RUB718.8 bln, or 2.2% of GDP.

[loganair] 14/8/2015 16:40

Revenue growth slows to 11.6% YoY in July. Yesterday, Dixy Group (JRS 11th Largest Investment) published a disappointing trading update for July. Consolidated revenue growth slowed 4.9 ppt MoM to 11.6% YoY or RUB22.1 bln ($387 mln), lagging general consumer inflation. For comparison, Magnit, the only other Russian retailer to have disclosed revenue growth in July, published a much stronger performance, reflecting revenue growth of 24.3% YoY. Segment-wise, sales at Dixy division stores grew the fastest, rising 12.5% YoY to RUB18.0 bln ($315 mln), while sales at the Victoria and MegaMart divisions increased 7.1% YoY to RUB2.6 bln ($46 mln) and 8.3% YoY to RUB1.5 bln ($26 mln).

Considering what's happening in Russia at the moment a 11.6% YoY growth isn't at all bad, especially considering how the equivalents here in the UK are hardly managing to eek out even the smallest of small sales growth.

[loganair] 11/8/2015 09:13

Russian GDP dropped 4.6% YoY in 2Q15. According to preliminary data published yesterday by Rosstat, the recession in Russia deepened in 2Q15, as real GDP dropped 4.6% YoY during the quarter after contracting 2.2% YoY in 1Q15. Rosstat's GDP estimate was worse than the preliminary estimate from the Economy Ministry (negative 4.4% YoY) and the Bloomberg consensus (negative 4.5% YoY).


The chances are, like with most other counties in the months to come the GDP drop with be revised up to a lower figure.

[loganair] 11/8/2015 09:11

Sales growth remains at 24% YoY in July - Magnit (JRS 2nd Largest Investment) released its July trading update yesterday. Total revenues effectively grew at the same rate as a month earlier, rising 24.3% YoY to RUB81.7 bln ($1.4 bln). However, sales growth at the company's convenience stores (the largest segment) decelerated 1.5 ppt MoM to 20.6% YoY in July, with sales amounting to RUB60.5 bln ($1.1 bln) for the month. Sales at Magnit hypermarkets rose 17.3% YoY to RUB13.8 bln ($242 mln), while sales at Magnit Family stores were up 79.1% YoY to RUB3.7 bln ($66 mln).

[votiem] 03/8/2015 11:38

Excellent posts Logan. Can't see myself dipping back in again yet - one just never knows with Russia.

[loganair] 03/8/2015 08:37

Not a surprise for the markets. On Friday, the CBR cut the key rate another 50 bps to 11%, its fifth rate cut this year. The move was not a surprise for the markets, as the Bloomberg consensus was for a 50 bps cut. Although the cut was in line with market expectations, it still weakened the ruble to beyond RUB61/$ for the first time since March. The regulator attributed its decision to the still-high risks to economic growth, as key macroeconomic indicators are pointing to a deeper slump in economic activity in 2Q15 than the 2.2% YoY contraction in 1Q15. Since the current recession has been at least partly driven by cyclical factors, persistent monetary easing should, in theory, support the economy. At the same time, the regulator acknowledged that inflation risks have risen moderately due to the deterioration in the terms of trade, high inflation expectations, the chance of more aggressive regulated tariff hikes in 2016-17 and loose fiscal policy. Nevertheless, the CBR expects inflation to resume its decline after the uptick in July (due to the tariff hike on 1 July), dropping below 7% YoY in July 2016 and reaching the 4% target level in 2017.

[loganair] 31/7/2015 10:41

Operating profit recovers 26% QoQ in dollars. Surgutneftegas (SNGS RX, SNGSP RX – Buy) (JRS 4th Largest Investment) published a brief version of non-consolidated 1H15 RAS accounts yesterday, from which we have calculated the key 2Q15 numbers. In 2Q15, revenues net of export duties rose 14% YoY and 4% QoQ in rubles to RUB268 bln ($5.1 bln). Operating profit rose 7% YoY and 23% QoQ to RUB74 bln ($1.4 bln) and the operating margin widened 1ppt YoY and 2ppt QoQ to 28%. In dollar terms, operating profit fell 18% YoY and rose 26% QoQ. The company reported a net loss of RUB11 bln ($0.21 bln) compared to net income of RUB140 bln ($2.3 bln) in 1Q15.

[loganair] 31/7/2015 10:40

1H15 operating update: sales and production rise - Fertilizer sales grew 9.7% YoY to 3.4 mln tons. Yesterday, Phosagro (PHOR LI – Buy) (JRS 15th Largest Investment) published an operating update for 1H15. Total fertilizer production and sales volumes both increased 9.7% YoY. Phosphate-based fertilizer sales volumes increased 14.3% YoY to 2.7 mln tons, while DAP/MAP sales grew 17.0% YoY to 1.4 mln tons. Nitrogen-based fertilizer sales volumes declined 4.5% YoY to 0.7 mln tons, driven mainly by urea sales, which declined 12.9% YoY to 0.5 mln tons. Phosphate rock sales volumes continued to contract, falling 26.3% YoY to 1.0 mln tons, while production volumes of phosphate rocks remained almost flat YoY.