Drukāt |

Norvik Research 08.12.2016

08/12/2016 16:07

Global developments

Markets are mixed ahead of today’s ECB meeting in absence of a consensus on its outcome. Bond yields are rising as investors are wary of the extent of ECB monetary stimulus going forward while stocks are broadly stronger. 10-year UST yields are up 3 to 2.37%, 10-year German Bunds yields are 2 bps higher at 0.37%. Euro Stoxx 600 is up 0.2%, S&P 500 futures are up 1.2%. Nikkei 225 is 1.3% higher while CSI 300 is marginally lower. The dollar index is lower 0.3%. Brent prices are up 0.8% at $53.4/bbbl.

Russia and CIS area developments and market colour

The rouble is 0.1% lower at 63.8 against the dollar. OFZ yields are 3-9 bps lower. Russia and Kazakhstan longer-term sovereign Eurobond yields are 4-5 bps tighter. Ukraine sovereign bonds are 2-7 bps tighter.

Corporate news

Rosneft surprised the market late yesterday when it announced a sale of the 19.5% stake to Qatar’s sovereign wealth fund (QIA) and Glencore, a commodity trader. According to comments by Rosneft CEO Sechin at his televised meeting with Putin, the consortium will pay EUR 10.5bn for the stake, a 5% discount to Rosneft’s share price on Tuesday (shared rallied 6% this morning). Glencore disclosed this morning that the transaction (yet to be closed) will involve its own equity investment of just EUR 300mn, with the rest to come from bank financing. Glencore will also secure a 5-year offtake deal for Rosneft’s oil, of 220K bbl/day. According to FT, bank financing is being organized by Intesa Sanpaolo. At the meeting with Sechin, Putin stressed the need for the government and Rosneft to coordinate the deal with the CBR, to minimize its impact on Russia’s financial markets.

The last-minute announcement (two days after the government’s deadline) means that the widely expected share buyback by Rosneft will not materialize and instead a consortium of two prominent foreign players will be the third largest shareholder of Russia’s largest energy company. This is clearly good news from the point of incoming FDI (which is important both from the balance of payments viewpoint and also as a chance to improve transparency of Rosneft’s operations). The exact details of the deal remain opaque however, most importantly whether proceeds of the recent RUB 600bn bond issue by Rosneft could be used towards the RUB 721bn payment to the budget. If this is the case, than the needed conversions would be less than $2bn, a manageable amount. In order to project the impact of the transaction on domestic FX market and interest rates, investors need to know further details, including the nature of demand for the RUB 600bn of bonds. Until yesterday, domestic interest rates did not react to the Rosneft-related transactions. At the same time, bank balances with the CBR fell sharply yesterday by about RUB 350bn, a sign of possible involvement of Russian banks (or corporates) in operations with Rosneft securities.

For more information on the research, please click here.

Norvik Banka Research
+44 207 259 8854

Brokerage department
+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.

Pēdējās ziņas