Forecasts and recommendations of analysts of IFH "RESMI" (Kazakhstan) for December 20, 2009

/IRBIS, December 20, 09/ - Finance & Investment House "RESMI" JSC (Almaty, IFH "RESMI") provided IRBIS overview of major events and their investment ideas and projections for December 20, 2009. Analysts now paying attention to the following investors' significant events: - Price of oil and foreign capital inflows continue to determine the state of the Kazakh economy. December 14, National Bank of Kazakhstan issued a report on the financial stability of Kazakhstan in 2009, which assesses the growth of the real economy of Kazakhstan in 2009, at the level of 0.1-0.3%. Support from the State and timely currency devaluations have played a positive role in the process of economic recovery. The report stated that, starting from the third quarter of 2009, there has been some recovery of economic growth, which partially offset the substantial decline in real GDP in the first half of 2009. This growth base while confined to specific industries. - The report shows the risk map, according to which a number of parameters remain in the area of availability of risk. However, in almost all areas of vulnerability at the end of 2009 recorded a significant reduction in pressure on the situation of the first quarter of 2009. In the area of risk continues to be indicators such as external factors, risks, profitability and capital adequacy of the banking sector, the credit risk of the banking sector and monetary and fiscal policy. In the first quarter of 2009 at risk were such things as debt burden, liquidity and market risks of banks, cross- border capital flows. - Negative economic growth that has emerged in Kazakhstan for 9 months in 2009 (-2.2%) compared to the same period last year (4%), demonstrated a high degree of economic dependence on external factors. Significant reduction in capital inflows into the country and falling world prices for energy manifested in the slowing economic growth in virtually all sectors of the economy. - As proof that the economy of Kazakhstan early recovery, 15 December Statistics Agency issued a release on the amount of investment in fixed capital for 11 months of 2009. According to the statistic data, in Kazakhstan in January-November this year, investment in fixed assets amounted to KZT 3,897.1 billion, that on 2.3% more than in January-November 2008. The priority sectors of investment are mining, as well as transport and communications, whose share in total investment in the reporting period amounted to 33.1% and 25% respectively. The main sources of funding were foreign funds and own funds of enterprises, organizations and people, 39% and 33% respectively. - The final restructuring of JSC "BTA Bank" and JSC "Alliance Bank" is scheduled for March 2010. According to the FSA, "BTA Bank" should convene a meeting of creditors for approval of a restructuring plan before March 23, 2010. In accordance with the legislation of Kazakhstan to obtain the approval of a restructuring plan requires the approval of creditors, which account for at least two-thirds of the volume of bank liabilities to creditors, to whom the obligation is expected to restructure. Meanwhile, Alliance Bank, was approved by the creditors of debt restructuring plan. At a meeting of creditors, the vast majority of creditors of the Bank (95.1%) voted for approval of the plan of debt restructuring of the Bank. The total amount of debt to be restructured is KZT 677 billion or about $ 4.5 billion (including accrued interest). As a result of the restructuring plan, the bank debt will be reduced by 4 times, up to about KZT 150 billion or $ 1 billion creditor approval of a restructuring plan is the latest step in the process of negotiations. Will be followed by approval of the restructuring specialized financial court of Almaty and implementation of specific procedures under a restructuring plan, which the Bank plans to complete up to March 1, 2010. - Rating evaluation of Kazakhstan: "stable". Dec. 16 ratings agency Fitch has confirmed long-term issuer default rating of Kazakhstan in foreign currency at "BBB-" and a similar rating in national currency at "BBB", improving the outlook to "stable" from "negative. The agency also affirmed the short-term issuer default rating to foreign currency at the level of "F3" and country ceiling at "BBB". According to the director of analytical group Fitch's sovereign ratings Andrew Colquhoun, increasing oil prices and capital inflows provide the growth of official reserves, which in turn strengthens the state balance and further supports "stable" outlook on the sovereign rating. Official reserves in Kazakhstan rose to a record level of $ 23.3 billion by the end of November, having increased by 17% from the beginning till now. In view of the National Fund assets (oil accumulation), reserves stood at $ 47.5 billion or about 44% of GDP. According to analysts IFD "RESMI", raising or maintaining the above-mentioned indicators at this level have a significant impact on the national currency and lead to its strengthening. Also, analysts believe that raising the rating to "stable" a positive impact on the indicator of Credit Default Swap. Additionally, the agency report stated that the asset quality of Kazakh banks have not yet completely stabilized, and the quality of its loan portfolio remains poor mainly due to two major banks that have committed non-payment ( "BTA Bank" JSC and "Alliance Bank "). The proportion of problem loans (loans with a delay of more than 90 days) in total had reached 19.7% in October 2009, having increased in comparison with 5,2% in late 2008. However, excluding banks that have committed non- payment, the level of problem loans at the end of October stood at 12.5%, and capitalization had a positive value (11%). - Kazakhtelecom JSC: "stable". Ratings Services Standard & Poor's revised the rating of Kazakhstan's largest telecom operator of Kazakhtelecom with "negative" to "Stable", which according to our assumptions, a positive impact on katirovkah shares of Kazakhtelecom. As expected analysts IFD "RESMI", issue bond volume KZT 45.5 billion and the subsequent repayment of the syndicated loan worth $ 350 million maturing in June 2010, led to a substantial improvement in liquidity position. In the next two years, the company will have minimum payments on debt obligations maturing, which can be provided with full operating cash flow. The rating upgrade to "stable" also reflects the likelihood that Government of the Republic of Kazakhstan will provide the company with timely and adequate emergency support during stressful financial situation. The main factor supporting the ratings of Kazakhtelecom is its dominant position in key segments, ensuring the company's revenues, which include local, long distance and international communications, data transmission, Internet access and other services with high added value. Improving the quality and capacity of the company's network, as well as a vertically integrated business model supported by the leading position of Kazakhtelecom on the market, which is unlikely to change in the next three years. Analysts of IFH "RESMI" give the following advice for investors in securities of issuers in Kazakhstan: -------------------------------------------------------------------------- Issuer Last price Predicted price* Up/down from Target RSI, Current price price** %*** ------------------ ---------- ---------------- ------------- ------- ----- Kazkommertsbak 647 912 +41.0 % 1,096 51.29 Halyk bank 329 409 +24.5 % 1,118 57.72 Bank Center Credit 780 1,218 +56.2 % 935 52.20 ENRC 2,100 On review 2,568 2,568 Kazakhmys 3,000 On review 3,452 3,452 RD KMG 21,500 26,380 +22.7 % 26,117 48.19 Kazkhtelekom 19,200 33,842 +76.3 % 21,700 50.97 -------------------------------------------------------------------------- Fundamental evaluation IFH "RESMI" for 12 months (weekly review) ** Target according to the consensus forecast of analysts surveyed by Bloomberg *** Relative strength index - an indicator of technical analysis. determines strength of trend and likelihood of change. Overbought / oversold - when RSI indicator value is closer to 100% / 0% - After correction occurred analysts of IFD "RESMI" expect growth in the value of ordinary shares of Kazkommertsbank. According to the IFD "RESMI" these papers will be worth no less than KZT 912 per share; - Halyk Savings Bank of Kazakhstan is estimated IFD "RESMI" as the most promising in terms of business development financial institution in Kazakhstan. According to the IFD "RESMI" growth is possible up to KZT 409 per share; - Shares of Bank CenterCredit in the long-horizon investment analysts IFD "RESMI" about the outlook for growth in bank securities to a level 1 230 m.; - Shares of Kazakhtelecom look the most attractive for investment in the long term. Analysts IFD "RESMI" believe that the potential for growth compared with the current price of 76% and recommend buying simple shareholders of the issuer. - JSC Exploration Production KazMunaiGas - the company is actively consolidating oil and gas sector in Kazakhstan, which exports about 80% of its oil. Provision is 5% of the total volume of proven reserves in Kazakhstan. Analysts of IFD "RESMI" sees upside of 23% in the conservative approach as is the preservation of the production level as in 2008, capex increased by 1.5 times, acquiring 50% stake in Mangistaumunaigaz and at an average price of oil at $ 65/barrel. The given material has exclusively information character and is not the offer or recommendation to make any transactions with the stocks. Agency Irbis doesn't take responsibility for the opinions which are in given material. [2009-12-20]