Global bonds are higher before FOMC meeting on Wednesday, while global stocks are rising. US 10-year Treasury yields are little changed at 2.59%. German and France 10-year government bonds yields are both 3 bps lower at 0.45% and 1.06% respectively. S&P 500 futures are 0.3% higher, Eurostoxx 600 is 0.2% up. CSI 300 is 0.9% up on positive macroeconomic statistics from China.
Oil prices fell further amid increased drilling activity in the US. Baker Hughes active rotary rigs number rose by 8 to 617 in the previous week. Brent prices are slightly lower at $51.4/bbl falling 5 trading sessions in a row (8.4% down from the start of the previous week).
The Republic of Croatia aims to issue 10-year EUR-denominated Eurobonds today. Spread guidance is around 230-235 bps over swaps.
Russia and CIS area developments and market colour
The rouble is flat today at 59.0 versus USD, reflecting oil prices dynamics. OFZ yields are 1-3 bps tighter today. Russia’s and Kazakhstan’s Eurobond yields are 1-2 bps tighter.
Evraz is placing 6-year USD-denominated Eurobonds today, to refinance existing debt. Coupon guidance is in 5.25-5.375% area.
Rostelecom announced positive Q4 2016 results last week. Free cash flow increased 72% YoY to RUB 15.6bn in 4Q 2016, extending the turnaround from Q3 (FCF was negative both in Q1 and Q2). In FY 2016, Rostelecom’s FCF reached RUB 13.3 bn, down from RUB 22.0bn in 2015. Sales totalled RUB 80.4 bn in 4Q 2016, a 10% QoQ increase. Full-year sales amounted to RUB 297 bn.
EBITDA declined marginally in Q4 to RUB 24.4 bn, or by 3% QoQ. On the year-on-year basis, EBITDA also declined slightly, falling 4% to RUB 96.8 bn. This modest declines in EBITDA was primarily due to lower reimbursements under the Bridging the Digital Divide project. On a positive side, the company continued to improve operational efficiency. During 2016, Rostelecom reduced its headcount by 5%, while Sales per worker increased to RUB 2.1 mn, compared to RUB 2.0 mn in 2015 and RUB 1.7 mn in 2012.
On 3 March the company’s board appointed M. Oseevskiy, formerly a senior executive at VTB, as the new president. Media reports link this appointment with the company’s objective to gain a controlling stake in T2 Holdings (a joint venture with Tele2). According to statements by the company, development of digital services will remain Rostelecom’s key focus.
For more information on the research, please click here.
Norvik Banka Research
+44 207 259 8854
+371 6701 1561
This report is prepared by Norvik Banka UK Limited, of 46-48 Grosvenor Gardens, London, SW1W 0EB, United Kingdom (hereinafter referred to as the Company) as a marketing communication for information purposes only. Neither the information nor any opinion contained in this report (notwithstanding the source) is intended to be, or should be construed as an offer, a recommendation, an advice or an invitation to make an offer, to buy or sell any financial instrument. Information contained in this report constitutes neither investment nor tax advice and it does not take into account the specific investment objectives, risk appetite and financial situation of anyone who may receive this report. Investors should seek their own advice regarding the appropriateness of investing in any financial instrument discussed in this report and carefully evaluate the risks and eventual losses that are related to the investment services and its compliance with their investment goals.
Investors should note that any income derived from investments in financial instruments may fluctuate and that the price or value of securities and investments may rise or fall. Accordingly, investors may lose their investment or receive back less than originally invested. Past performance and income is not a guide to future performance and income. Foreign currency exchange rates may adversely affect the value, price or income of any security or related investment mentioned in this report. Investing in the Russian or CIS economies and securities involves a high degree of risk and requires appropriate knowledge and experience.
The information contained in this report have been obtained from such public sources what are believed to be reliable, but no representation or warranty is made by the Company with regard to accuracy. Therefore the information contained herein is subject to change without prior notice.
This report should not be viewed as the only source of information, and neither the Company, nor the companies within the NORVIK group and/or any affiliates or employees thereof accept any responsibility or liability whatsoever for any direct or indirect damage arising out of or in any way connected with the use of information contained herein, nor for its authenticity.
This report may not be distributed, copied, reproduced or changed without prior written consent from the Company. Further information, which for the avoidance of doubt cannot be treated as the recommendations and/or advice either, may be obtained from the Company upon request.
This report has not been prepared on the basis of the requirements of regulatory provisions promoting independence of investment research and is not subject to the prohibition from making transactions before disseminating investment research.
Norvik Banka Research is a Trading Name of Norvik Banka UK Ltd, which is Authorised and Regulated by the Financial Conduct Authority, FRN: 681329. Registered in England and Wales with number 08940522. Registered Office: 46/48 Grosvenor Gardens 1st Floor, London, SW1W 0EB.
The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. If you are not the recipient, you are hereby notified that any disclosure, copying, distribution or taking action in relation of the contents of this information is strictly prohibited and may be unlawful.
This email has been scanned for viruses and malware, and may have been automatically archived by Mimecast Ltd, an innovator in Software as a Service (SaaS) for business. Providing a safer and more useful place for your human generated data. Specializing in; Security, archiving and compliance. To find out more Click Here.