Jpmorgan Russian Securit... Share Discussion Threads

[loganair] 13/2/2016 11:20

In Russia businesses are deliberately reducing wages in order to increase their own profits. In 2015, nominal wages grew by 4.6 percent, while company profits increased by an average of 49 percent.

What is most is likely is an inflow of funds from Western capital markets as many European countries have negative interest rates, meaning that money is almost worthless within the country, and investors are being forced to seek projects abroad.

Russian borrowers, including the government, have always been disciplined and have typically paid their debts on time.

[loganair] 12/2/2016 11:43

Strong start to the year. Yesterday the finance ministry reported that the federal budget ran a surplus of RUB390 bln or 7.4% of GDP in January. This has got the year off on a solid footing, as the budget ran a deficit of RUB216 bln in January 2015.

[loganair] 10/2/2016 22:00

31st December 2015 - Portfolio analysis by JP Morgan:

The trust's share price underperformed the benchmark, while the net asset value outperformed. Stock selection was weakest in the energy sector, where our lack of exposure to Transneft hurt performance. The stock performed well on the back of an announcement that oil exports increased by 7.4% year on year. Stock selection was strongest in the consumer staples sector, led by our investment in Ros Agro, one of the largest vertically-integrated agriculture holding companies in Russia. We reduced some of our exposure in Ros Agro on the back of strong relative performance, which has lowered our expectations for longer-term returns. We have continued to re-invest some of the proceeds into the energy sector, driven by our belief that the current share prices are discounting an almost apocalyptic outcome for businesses. Any normalisation should see this pessimism reverse. We also reduced positions in Russian consumer staples stocks on the back of weaker-than-expected sales growth.

[loganair] 10/2/2016 12:10

Revenue in January increased 15.1% YoY, slowing in all segments but cosmetics. Magnit (JRS 3rd Largest Investment) yesterday released a trading update for January which reflected some slowdown in revenue growth month-on-month. Consolidated revenues rose 15.1%YoY to RUB80.5 bln ($1.1 bln) – a 1.6 ppt decline MoM. Sales growth at convenience stores, the company’s key segment, increased 13.2%% YoY to RUB59.5 bln ($0.8 bln)– 0.5 ppt slowdown MoM. Sales at the hypermarket division rose by 2.7% YoY to RUB12.6 bln ($164 mln) – a 2.3 ppt deceleration MoM. Sales at the family rose 40.6% YoY to RUB4.3 bln ($56 mln) – an 8 ppt slowdown MoM. However, at the cosmetics segment revenues surged 95.4% YoY to RUB4.1 bln ($54 mln) – an 8.6 ppt acceleration MoM.

[loganair] 09/2/2016 10:09

Inflation may fall below 9% by end 1Q16 - CPI decelerated to 9.8% YoY in January. According to Rosstat data released on Friday inflation grew 1%MoM in January after adding 0.8% MoM in December and thus decelerated for a fifth consecutive month to 9.8% YoY in January from 12.9% YoY in December. The monthly figure was in line with the Interfax consensus. Core inflation grew 0.8% MoM in January after 0.6% MoM growth in December and decelerated to 10.7% YoY in January from 13.7% YoY the previous month.

[loganair] 06/2/2016 09:31

The Russian stocks rallied yesterday as the market was spurred by the previous night's oil price rally. The RTS Index gained 6% by the close. The ruble however oscillated around RUB76.8/$ mark as the US dollar continued to weaken versus major currencies in the first part of the day. Yesterday’s macro data were not encouraging again, as the US reported a 3% slump in 4Q15 non-farm productivity (a 2% decline was expected) and an increase in the initial Jobless claims for the week ending 30 January. In addition, factory orders and durable goods orders declined more than expected in December. Sentiment that the Fed may refrain from raising the rate this year is gathering strength on the market.

[loganair] 06/2/2016 09:29

Fee float rising after Chengdong exit - Yesterday it was disclosed that Chengdong Investment Corp (owned by China Investment Corp) sold its 5.2% stake in Moscow Exchange (JRS 4th Largest Investment). CIC sold 119.1 mln shares at RUB89/share (around $1.17/share), around 10% below Wednesday's close (which was a record high for the stock), for a total of RUB10.6 bln. Chengdong was the fifth-largest shareholder in the Exchange, and according to CEO Alexander Afanasiev, the stake was bought by several dozen institutional investors, both domestic and foreign.

[loganair] 03/2/2016 08:15

The Russian stock market displayed a similar behavior yesterday to what it did on Monday remaining fully dependent on oil sentiment. The short-term trend in oil prices is absolutely unpredictable as too many factors are influencing the price. Brent continued to fall yesterday sending the ruble more than 2% lower and, consequently, Russian equities closed much lower: the RTS Index lost 4% by the close. Russian Services PMI came out at 47.1 for January, continuing the decline. This morning oil continues to trend downwards and Brent futures are below $33/bbl.

[loganair] 03/2/2016 08:13

Kommersant is citing Olga Dergunova, the head of Rosimuschestvo, the government agency in charge of managing state property, as saying that the cabinet is considering a raise in the minimum 2015 dividend payout ratio for state-controlled companies from 25% to 50%. The move would bring an extra RUB110 bln ($1.5 bln) to the federal budget in 2016.

Many of these companies, even though state controlled still have a sizable chunk of their shares in public hands and which JRS is invested in.

[loganair] 02/2/2016 12:05

Surprise for me to see an increase in the Dividend payment, with the 'Special' dividend comes to a total of 17p, the highest dividend JRS has ever paid.

I am also very much in favour of and pleased to see "The Board have therefore decided that in order to provide greater investment flexibility they should propose to change the Company's investment objective and policies to permit up to 10% of the Company's gross assets to be invested in companies that operate or are located in former Soviet Union Republics. It is the Board's intention that this will allow the investment management team to use their knowledge of companies with links in Russia," as I have been saying and writing to JP Morgan the same about their Brazil Trust (JPB) that I would like to see 15% of JPB invested in other South American countries such as Peru, Chile and even Mexico and their Indian Trust (JII) to possibly include the other Indian sub-continent countries in the same way their China Trust (JMC) also includes both Hong Kong and Taiwan.

I do not know whether it helped at all as I have written several times to the board of JRS that I would like this trust to include other of the CIS states so this trust would become more diversified as a Greater Russia trust.

The one question I would ask, does 'former Soviet Union Republics' also include the 3 Baltic countries that are now in the EU?

[togglebrush] 02/2/2016 11:06

FY results out extract

Dividends

Revenue for the year, after taxation, was GBP10,268,000 (2014: GBP7,029,000) and the revenue return per share, calculated on the average number of shares in issue, was 19.60 pence (2014: 13.38 pence).

Based upon the revenue generated by the portfolio, the Board proposes an ordinary dividend of 13.00 pence (2014: 13.00 pence).

The significant devaluation of the Ruble during the year resulted in a number of portfolio companies reporting... with exceptional foreign exchange
the Board propose the payment of a special dividend of 4.0 pence.

Both dividends to be paid on 11th March 2016
to ordinary shareholders on the register at on 12th February 2016,

[loganair] 29/1/2016 08:26

4Q15 IFRS numbers somewhat better than expected on profitability - Magnit (JRS 3rd Largest Invesment) yesterday released 4Q15 IFRS results which slightly exceeded market expectations on profitability. Revenue increased 18% YoY to RUB260 bln ($3.9 bln), largely in line with the trading update published earlier. EBITDA rose just 14% YoY to RUB28.8 bln ($437 mln) which was 2% above consensus estimates and the EBITDA margin declined 0.4 ppt YoY to 11.1% (vs. the 10.7% consensus forecast). For the full-year, EBITDA reached RUB104 bln ($1.7 bln), up 21% YoY and the EBITDA margin dropped 1.3 ppt YoY to 10.9%.

[flying pig] 26/1/2016 07:45

hxxp://www.mauldineconomics.com/this-week-in-geopolitics

An interesting view of the Russian world!

PS Loganair - thanks for the continued updates. I continue to add in a modest way

[loganair] 25/1/2016 08:12

Sales up just 14.4% YoY in December, 3.5 ppt decline MoM. On Friday DIXY Group (JRS 12th Largest Investment) released a weak trading update for December. Revenue growth significantly slowed MoM. In particular, growth in consolidated revenue decelerated 3.5 ppt MoM to 14.4% YoY to RUB28.0 bln ($401 mln).The DIXY division revenues rose 16.9 % YoY (vs. 21.0% YoY in November) to RUB22.2 bln ($319 mln) which was still better that the 14.7% YoY growth posted for the month by the convenience store division of Magnit (JRS 3rd Largest Investment) which is leading the market. The Victoria division increased its sales by 11.4% YoY to RUB3.7 bln ($53 mln) while the MegaMart division posted 3.8% YoY decline in sales to RUB1.9 bln ($27 mln). The group recorded full-year revenue growth for 2015 of 18.9% and the DIXY division posted 21.5% growth.

[votiem] 21/1/2016 23:10

Hi Logan,

Your informed posts appreciated as ever.

I'm going to wait for a near collapse before vulturing in. Terrible near-term outlook for Russia... imho

Best to you.

[loganair] 21/1/2016 20:19

With an increase of 21.8 tonnes in its gold reserves in December, Russia continues to build its central bank bullion holdings.

The December increase in the Russian central bank's gold reserves brings the rise year on year to 208 tonnes. Over the past six months, Russia has added 139.6 tonnes to its reserves as against 103.9 tonnes by China (the latter has only been reporting its month by month figures since July). China and Russia between them account for close to 90% of all announced central bank gold purchases. Both have an intent to build up their gold reserves believing they will consolidate their positions in any new global financial order which may develop over the next few years.

[loganair] 21/1/2016 20:16

Last year, 2015, JRS results and dividend Declaration was on the 27th January, so only a few more days then we'll now how JRS is doing and what the Divi will be.