reports
- Yuri Golban
BCS Placement Preview: Sibur (Baa3/BBB-/BBB-) – Fair YTM for new 5Y ...
Sibur – a Russian petrochemical company – is marketing new 5Y USD-denominated Eurobonds. We see fair YTM at 2.75-2.85%. – Sibur is one of Russia’s largest vertically integrated petrochemical firms … … with a well-diversified product portfolio – 1Q20 – Weaker EBITDA led to marginal net leverage growth to 2.2x … … but refinancing risks remain low – 2020 – Lower EBITDA, Amur GCC project, dividends to raise leverage … … but ZapSib ramp up, market recovery t...
BCS Fixed Income Daily: Sibur
China Mfg beats vs WHO alarm, pressured Brent Ahead: Prudence entering holiday. China official June manufacturing PMI beat (50.9 vs 50.4 expected), signaling economic recovery is continuing and, hence, demand from the world’s largest importer of oil is, for now, intact – fodder for the Bullish generally and oil Bulls in particular. However, any upside will be capped by WHO’s foreboding assessment that the COVID-19 pandemic “is not even close to being over… [and] the worst is yet to c...
BCS Equity Daily: Transneft, NLMK, MTS, RusHydro
China Mfg beats vs WHO alarm, pressured Brent Ahead: Prudence entering holiday. China official June manufacturing PMI beat (50.9 vs 50.4 expected), signaling economic recovery is continuing and, hence, demand from the world’s largest importer of oil is, for now, intact – fodder for the Bullish generally and oil Bulls in particular. However, any upside will be capped by WHO’s foreboding assessment that the COVID-19 pandemic “is not even close to being over… [and] the worst is yet to c...
- Elena Tsareva
- Veronika Yan
BCS Update: TCS – Valuations rich; 2020 financials weakish
We increased our 12MF TP to $24/GDR and Rb1640/sh, helped by lower RFR and updated forecasts. However, the TP upgrade still implies -1% Excess Return and current valuations are rich – we retain our Hold call on TCS. – April-May lockdown pressured activity, positive signs in June – TCS strong, set to navigate downturn – 36% of revenue now non-credit – L-T story remains intact –2021-23 NI CAGR 23%, ROE avg 30% – Yet, valuations look rich – 2020e P/E 10.7x, a 30% premium to histo...
- Slava Smolyaninov
- Vasiliy Mordovtsev
- Yulia Goldina
BCS Equity Strategy (View): Best S-T stocks to Out/Underperform
We stay neutral on Russia – key economic data this week (China, EZ, US mfg; US, EZ labor data; Fed minutes) could sway the direction of trade. – S-T Market View: Neutral on Russia – Outperformers – No sectors, only stocks… ... Stocks – HYDR, RSTI, GMKN, MTS, MOEX, DSKY, SNGSp (new), MAIL (new) – Underperformers: Sector – O&G, select M&M and Transport … … Stocks – ROSN, TRNFp, RTKM, AFLT and VTBR – Neutral – Utilities, TMT, select M&M, Retail, Banks and Fer...
- Maria Radchenko
- Slava Smolyaninov
- Vladimir Tikhomirov
BCS Week Ahead: Macro, Oil, Equity / FI Strategy
The ruble may exceed Rb70/$ this week on rising COVID cases and the end of the tax period, while oil will trade at $37-42/bbl. We retain a neutral view on equities. For Eurobonds, expect a calm week, while a bounce in OFZ is unlikely. Slava Smolyaninov, Executive Director, Chief Strategist, Vladimir Tikhomirov, PhD, Executive Director, Chief Economist, Maria Radchenko, Executive Director, Deputy Head Fixed Income Research, Ronald P Smith, Executive Director, Senior Analyst, For more de...
- Vladimir Tikhomirov
BCS Economic Digest: Market confidence subsides
Sobering news flow continues. Last week, markets powered higher and, like many times before, bad news merely triggered a knee-jerk pullback. Nevertheless, the worsening economic outlook – the IMF followed world central banks with yet another downgrade – forced institutional investors to take a neutral stance. In many markets, the index was driven higher mostly by retail investors searching for new savings instruments amid zero (and in some cases negative) deposit rates. Still, this growth is...
BCS Fixed Income Daily: Phosagro
COVID cases spike, Brent retreats Week Ahead: Headwinds. Global bourses have closed lower (US) or are retreating (Asia) as COVID-19 related deaths breached 500k, and record numbers of new cases in the US, Germany, India, LatAm as well as new outbreaks in Australia and China. The resurgence has elevated concerns the affected countries will re-impose lockdowns in areas that had been re-opened and/or slow planned re-openings, impeding the global recovery as warned by the IMF last week in its sobe...
BCS Equity Daily: Index Alert, Oil & Gas, Steel, Norilsk Nickel, Phosa...
COVID cases spike, Brent retreats Week Ahead: Headwinds. Global bourses have closed lower (US) or are retreating (Asia) as COVID-19 related deaths breached 500k, and record numbers of new cases in the US, Germany, India, LatAm as well as new outbreaks in Australia and China. The resurgence has elevated concerns the affected countries will re-impose lockdowns in areas that had been re-opened and/or slow planned re-openings, impeding the global recovery as warned by the IMF last week in its sobe...
- Anastasia Egazaryan
BCS Resume Coverage: Aeroflot – Worst is over, but recovery takes ti...
We Resume Coverage of Aeroflot with a TP of Rb90 – -2.5% excess return, Hold. The worst is likely behind, but the Street may be overoptimistic on the pace of recovery, while visibility is low – we err on the side of caution. – Market hit bottom: ’20 global RPK -55%, revenue -55%+, debt up 1/3 (IATA) o Recovery takes time – Fleet surplus, pressure on yields – AFLT RPK -58% for ‘20e; PLF 66% – No chance for +ive financials this year o BCSe ‘21e RPK to bounce 93%, full...
BCS Fixed Income Daily: Fund Flows, Sibur
Brent recoups, COVID lingers Ahead: Buying weakness, higher oil … capped by COVID. Following weakness, expect some buying into the dip. Helping, Brent has retaken some lost ground on indications of an improving demand outlook as economies (e.g., China) reopen for business – still, upside will remain capped on plans of US oil producers to resume some production in July. Meanwhile, Wave 2 of COVID-19 is a clear and present danger, which will cap any upside – e.g., after re-opening segments ...
BCS Equity Daily: Fund Flows, Gazprom, Norilsk Nickel, Petropavlovsk, ...
Brent recoups, COVID lingers Ahead: Buying weakness, higher oil … capped by COVID. Following weakness, expect some buying into the dip. Helping, Brent has retaken some lost ground on indications of an improving demand outlook as economies (e.g., China) reopen for business – still, upside will remain capped on plans of US oil producers to resume some production in July. Meanwhile, Wave 2 of COVID-19 is a clear and present danger, which will cap any upside – e.g., after re-opening segments ...
- Slava Smolyaninov
- Vasiliy Mordovtsev
BCS Flows & Positioning: Sentiment Remains Volatile
Global investor sentiment remains volatile – as with international flows – over the past several weeks, the data underlines. Retail remains the only ongoing supportive category with its optimism and capitulation of short-sellers. – Retail: Longs up 1.4% – Retail stays optimistic – ETFs: Inflows due to EM ETFs solely – Institutionals: Balanced flows with slight skew to net sell – Active Buys: TRNFP, GMKN, ALRS, MTSS, DSKY (new) – Active Sells: FIVE, YNDX (new), TATN, PHOR, NLMK ...
- Vladimir Tikhomirov
BCS Insight: Ruble – A new era, a new resilience
The Russian currency has shown notable resilience to negative events – from collapsing crude oil prices to the largest decline in GDP in 11 years. Such stability stems from recent policy changes by the government and CBR. – Ruble less a petrocurrency – Oil linkage much weaker o In 2018-20, Rb/$ was clearly more stable than the oil price – RUB Free-float minimizes effects of shocks to economy, reserves – ‘Budget rule’, CBR FX interventions offered support to the RUB o Av...
BCS Fixed Income Daily: Economics, Gazprom, LUKOIL
IMF downgrade, US jobs weakness, COVID resurgence Ahead: Cautious trade at play. The IMF again downwardly revised its global growth forecast, projecting 2020 GDP of -4.9%, lower than the -3% predicted in April. Enthusiasm will be further tempered ahead of US jobless claims, which are expected to remain extraordinarily high, while a resurgence in confirmed COVID-19 cases in the US (as well as Germany, LatAm), linked to the reopening of businesses, is also dimming the economic recovery outlook. ...
BCS Equity Daily: Economics, Oil & Gas, Polymetal, Petropavlovsk, Sber...
IMF downgrade, US jobs weakness, COVID resurgence Ahead: Cautious trade at play. The IMF again downwardly revised its global growth forecast, projecting 2020 GDP of -4.9%, lower than the -3% predicted in April. Enthusiasm will be further tempered ahead of US jobless claims, which are expected to remain extraordinarily high, while a resurgence in confirmed COVID-19 cases in the US (as well as Germany, LatAm), linked to the reopening of businesses, is also dimming the economic recovery outlook. ...
QIWI QIWI PLC SPONSORED ADR CLASS B
POG PETROPAVLOVSK PLC
SBER SBERBANK RUSSIA PJSC
POLY POLYMETAL INTERNATIONAL PLC
MAIL MAIL.RU GROUP LTD. SPONSORED GDR
SBNC SBERBANK RUSSIA PJSC SPONSORED ADR
HSBK KZ SBERBANK OF RUSSIA PJSC
SBERP HALYK BANK
HHR SBERBANK (PREF A)
HEADHUNTER GROUP PLC
HEADHUNTER GROUP PLC-ADR
- Maria Sukhanova
BCS Update: TMT – Online is king
We raised our Rb TPs for the TMT sector 10-30% after the sharp drop in interest rates and, thus, cost of capital. Yandex is back to Buy, given solid L-T growth outlook and potential catalysts. MTS – on Hold, after a bounce. HHR now a Sell. – Trends in 1Q20 and Spring – Pressure in ad, telecoms fairly resilient o As expected; macro and virus’ concerns will define pace of recovery – Yet, market focuses on L-T growth, and internet stocks have much to offer o We forecast 20-30% EP...
QIWI QIWI PLC SPONSORED ADR CLASS B
AFKS SISTEMA PJSFC
MAIL MAIL.RU GROUP LTD. SPONSORED GDR
RTKM ROSTELECOM PJSC
MTSS MOBILE TELESYSTEMS PJSC
KO71 SISTEMA PJSFC SPONSORED GDR REGS
VEON VEON LTD.
RTKMP VEON LTD. SPONSORED ADR
HHR ROSTELECOM (PREF A)
HEADHUNTER GROUP PLC
HEADHUNTER GROUP PLC-ADR
- Elena Tsareva
BCS Trade Idea Opened: Long Halyk Bank – EGM set, 2019 dividends on ...
We open a Long Halyk Bank Trade Idea, expecting a 15% return by August, on the announced 60% payout for 2019, providing a dividend yield of 14%. – Dividends for 2019 – 60% payout, 14% dividend yield… ... on improved macro outlook – Strong capital position – 20.6% CET1R for 1Q20 … ... Halyk’s Bear Case – 17% CET1 for 2020, post divi – Halyk remains one of the high quality banks in the region … ... high ROE, low LDR level of 59% and strong CAR position, 20.6%...
BCS Fixed Income Daily: Gazprom
US-China ‘trade winds’ + c$43 Brent v COVID surge Ahead: Upside bias early on. US President Trump’s latest tweet has countered the earlier headwind in which a White House advisor signaled the trade deal with China was “over†– the tailwind came when Trump tweeted “China trade deal is fully intact.†Brent is flirting with $43/bbl, helped by renewed US-China trade hopes, a continued re-opening of economies and a record-low US and Canadian rig count. Still, upside has been capped a...
BCS Equity Daily: Gold, Mail.ru, Inter RAO, Aeroflot
US-China ‘trade winds’ + c$43 Brent v COVID surge Ahead: Upside bias early on. US President Trump’s latest tweet has countered the earlier headwind in which a White House advisor signaled the trade deal with China was “over†– the tailwind came when Trump tweeted “China trade deal is fully intact.†Brent is flirting with $43/bbl, helped by renewed US-China trade hopes, a continued re-opening of economies and a record-low US and Canadian rig count. Still, upside has been capped a...
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