Now Russia”s stock market and bond there was concern about slowing growth in China, which can strike the most vulnerable point of Russia”s financial sector and the economy - commodity prices. That is the price of oil in Russia depend on both the cash flows of companies and, ultimately, the discount rate. Go is to say that the real picture of China”s economy is probably no one knows, can only roughly assess the current situation. The reason for this is the socialist system of accounting, the quality of financial reporting and transparency in China much like Russia”s third echelon.

Real GDP for the first 9 months of 2009 showed growth at 7.7% during the growth of 9,9% over the same period last year. Dynamics of production on the breakdown of economic activities (industry and construction, agricultural sector, other sectors) shows a similar dynamic. Growth of industry and construction account for 7.5%, slightly yielding to “other sectors” - 8,8%. At the end of 2 quarters of 2009, there has been steady increase in average wage growth rate is 12,4-12,8%. Business Climate Index in various industries on the basis of 4 square. 2008 - 3 quarter. 2009 show a high volatility, but the observed real GDP growth rate.

China

Source: National Bureau of Statistics of China

Reducing the rate of growth, of course, can cause some suspicion. However, China, despite the growth of domestic demand is still very tied to the U.S. market, respectively, started out of the U.S. economy from the crisis can not inspire optimism. It is unlikely that the Fed would tighten monetary policy before the final withdrawal of the U.S. economy from the crisis, the risks of new U.S. issues in the current situation tend to zero. Continuing high rates of economic growth for China”s political leadership is an essential goal, measures to cool the economy, if accepted, will be local. Chinese bear not particularly frightening, however, we caution against excessive optimism.

Yesterday the Fed gave a slightly more optimistic assessment of the economy and reiterated its intention to complete by February 1, four anti-crisis program lending by the end of March - the program of redemption of mortgage bonds. It is worth noting that the President of the Federal Reserve Bank of Kansas City Thomas Hoenig called for the tightening of monetary policy, in fact it is the first call to “bear” piece. From our point of view, the tightening of monetary policy the Fed and the correction in oil prices this year are unavoidable, we focus in 2010 on the corridor Brent 65-75 dollars /barrel, ie Current oil prices are closer to our upper limit. In terms of discounted cash flows in our corridor Brent 65-75 dollars /barrel. corresponds to the passage of the RTS index in 1800-2000 points.

We believe that Russia”s companies that are tied to the Chinese market as a whole should not expect problems. For investments, we can distinguish Rosneft and to a lesser extent UralKali.

Rating developments affecting Russia”s market

C

 

C

C

 

 

NOTE:

1. most powerful influence on the market have an event with a rating of A events with D rating on our scale, have little influence.

2. In the sections “Macroeconomics” and “Commodity Markets” in column 2 in the brackets can be specified rating of the previous day.
3. down arrow in column 3 indicates the likely negative impact on the market, the arrow “up” - positive /neutral.

FUNDS - moderately negative

The only “fly in the ointment” in a news background - the negative data on sales of durable goods
If the wave is positive continue, paper Rosneft may test resistance as the uptrend from the July 2009
In leaders enhance the action of the banking sector: “Savings Bank” an (2,7%), VTB (3.9%), as well as shares RusHydro, which added 3,89%
Xetra DAX index rose 0.73%, FTSE 100 added 0.7%, CAC 40 rose to 0.64%
Indicator RTS-2 added, following today”s session, 0,48% and amounted to the closing of 1,497.25 points
On the ruble bond market on Thursday there has been growth in investment activity of players
Despite the rebound, observed in the market a second consecutive session, the MICEX index is trading near the bottom of the channel
Presumably the spring is still room for growth of stock quotes ConocoPhillips
As Hoenig markets worried