Drukāt |

Norvik Research – 17.08.2016

17/08/2016 17:31

Global developments

Hawkish comments from senior Fed officials brought the recent rally to a halt. William Dudley, Fed Vice Chair and New York Fed president, said yesterday that markets were complacent in ruling out a near-term interest rates hike. Atlanta Fed chief, Dennis Lockhart, said that he expects monetary tightening already this year. The dollar index is up 0.2% rebounding from a 2-month low level. 10-year US Treasury yields increased 2 bps to 1.57% yesterday. S&P futures are flat after the benchmark weakened 0.6% yesterday; the Euro Stoxx 600 is down 0.3%. Nikkei 225 rose 1.0% as the yen depreciated 0.5% to 100.8 against the dollar. Chinese CSI 300 fell 0.2%. Bloomberg commodity index is down 0.5%.

Oil prices contracted on negative gasoline inventories data. American Petroleum Institute reported US crude oil stocks declining 1.0mn bbl in the previous week but gasoline stockpiles expanded unexpectedly by 2.2mn bbl. Brent prices declined 1.1% to $48.7/bbl today after rising 1.8% yesterday.

US Fed releases minutes from July 26-27 FOMC meeting today at 18:00 GMT.

Russia and CIS area developments and market colour

Russia’s federal budget deficit improved in July. On our estimates, on a 12-month rolling basis, budget deficit tightened to 3.1% of GDP in July from 3.3% of GDP in June. Total revenue fell from 15.3% of GDP in June to 15.1% of GDP in July, extending the steady decline from 20.3% of GDP in December 2014. Oil revenues contracted to 5.8% of GDP in July from 5.9% in June, non-oil revenues declined from 9.4% of GDP to 9.3% of GDP during the same period. Expenditures declined from 18.6% of GDP in June to 18.2% in July after gradually increasing since February 2016. Overall, budget performance in June-July reflected this year’s spending commitments better than the extremely tight budget execution early in the year. We currently expect full-year deficit to be close to 3.5% on the assumption of average oil prices of $47/bbl (for Brent).

The rouble is 0.5% weaker against the dollar today at 64.1. OFZ yields were unchanged or widened about 1-2 bps yesterday despite higher oil prices. CIS area sovereign Eurobonds are broadly weaker or unchanged today. Russia and Kazakhstan longer term bonds are 1 and 3-6 bps tighter. Ukraine Eurobonds are mostly unchanged while Ukraine 19 is 7 bps tighter. Azerbaijan 24 is flat while Armenia 25 and Belarus 18 are marginally tighter.

MinFin will hold two auctions today. In the first auction MinFin will offer September 2026 fixed-coupon OFZ for RUB 10bn, the second auction will be for RUB 10bn of January 2020 floater.

Corporate news

Phosagro may pay additional dividend. The Board of Directors recommended paying additional intermediate RUB 4.3 bn dividend out of net income for 2015. Increased payout is driven by changes in dividend policy, as Phosagro shifted from a 20-40% net income payout ratio to 30-50%.

The company will present its financial results for the 1H 2016 today.

For more information on the research, please click here.

Norvik Banka Research
+44 207 259 8854

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.

Pēdējās ziņas