Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for May 14, 2010

/IRBIS, May 14, 2010/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for May 14, 2010. Analysts of JSC "BCC Invest" at the opening on today's trading expect growth of quotations of shares at KASE behind their foreign counterparts. Yesterday Shares ENRC PLC and Kazakhmys PLC on the London Stock Exchange rose respectively 3.84% and 2.71%. Yesterday, also Depositary Receipts of Halyk Bank, Kazkommertsbank and KMG in London have risen - on 2.69%, 3.13% and 0.75% respectively. However, the negative closing trades in the U.S. yesterday, and pessimism in Asia today may cause the fixation of profits and sales in the Kazakhstan market shares, especially before the weekend. Analysts JSC BCC Invest also expect the following developments in international markets: - May 13, 2010 JSC Exploration Production KazMunaiGas published condensed consolidated interim financial statements for the three months ended March 31, 2010. Operating profit amounted to KZT54.6 billion (370 million U.S. dollars) that in 174% more than in the first quarter of 2009. Net profit for the period amounted to KZT51.7 billion (350 million U.S. dollars). Basic earnings per share amounted to KZT708 (USD0.8 per GDR). The average price of crude Brent in the first three months of 2010 was 72% higher than in the same period last year, up from $44 per barrel to $76 per barrel. Commenting on the financial results for the first 3 months in 2010 where Mr. K.N. Ibrashev CEO of the Company said: "In general, the Company obtained good results for the first quarter of 2010, despite a decline in production associated with the protest in Ozenmunaygaz. Operating profit increased significantly as a result of growing oil prices, as well as increased profits from shares in companies Kazgermunai (MAG), CCEL (Karazhanbasmunai) and PetroKazahstanInk. (PKI). In the future, KMG intends to maintain current production levels for these assets of the company and expand the production base through acquisitions. "Yesterday, on the basis of published data analysts of JSC" BCC Invest "revised model for evaluating the shares, and released a new survey by JSC Exploration Production KazMunaiGas. Analysts have increased trust prices of shares and GDRs from KZT20,300 to KZT21,300 per share and $23.30 to $24.50, leaving unchanged the recommendation on the level of "HOLD". - Yesterday Eurasian Natural Resources Corporation PLC have announced operating results for the first quarter of 2010 with the interim leadership commentary on the current state of the company. Production volumes were significantly higher than the data for the same period last year. Production of ferrochrome and iron ore occurred at full capacity utilization, production of aluminum increased. Prices of products continued upward trend of last year. High sales volumes high-carbon ferrochrome and aluminum took place against the background of some decline in the rest of the main products in comparison with the data for the fourth quarter of 2009. Cost of sales increased in comparison with those for 2009 for all units, except for Energy. The most notable increase occurred in the Division of ferroalloys and aluminum and alumina. Strong financial position, which has not changed much compared to last year. In addition, the Company noted the recent acquisitions in Africa and the full load capacity aluminum smelter in May of this year. According to analysts of JSC "BCC Invest" operating results of the first quarter of this year, moderately positive for the stock price of the company. Analysts forecast production for the first quarter was at the end of last year, which eventually turned out slightly worse than the actual data, but the optimistic view of management on plans for 2010 could positively influence the actions of ENRC. Moreover, activation of the company's market of mergers and acquisitions may also have a positive impact on its shares. The recent market decline was a good opportunity to enter the market, but analysts of JSC "BCC Invest" said growth of potential relative to its fair value is not so significant, in connection with what analysts confirm that the current recommendation to "hold" on these securities. However, in the near future analysts are planning to release a new report on securities companies Eurasian Natural Resources Corporation PLC in the light of published data. - KASE has published an audit report on the consolidated financial statements Tsesnabank for 2009. The results of the audited financial statements for the year 2009, as analysts of JSC "BCC Invest" had expected, were much worse than a preliminary assessment of the bank's management. Output of this report was in fact the first audited publication with the first quarter of 2009 and confirmed a poor state in the previous period. Nevertheless, despite the loss-making in 2008, the bank has managed over the past period to show a positive change in interest income and fees, which resulted in increase in the loan portfolio and growth in total assets. Operating and pretax income were in positive territory, but fell far short of analysts' forecasts of JSC "BCC Invest" (almost twice). Net income was also below analysts' expectations. Net assets rose by 30.0%, and that the amount of the loan portfolio increased by 21.0%. Particular attention should be paid more than 40% condom raise cash, and nearly twice the fair value of financial instruments on the balance of the bank, which resulted in recovery of global and local economy, and therefore the fundamental values of assets and depositors' confidence has increased. According to analysts of JSC "BCC Invest" This report is moderately positive for quotations of ordinary shares of the bank, despite the significant difference in the forecasts, as the financial results indicated that the bank has legal competence, and may well generate income. Nevertheless, net profit was significantly below the cost of capital, which means that residual income has been negative, indicating the operating inefficiencies. In the absence of a liquid market for ordinary shares Tsesnabank "analysts confirm that the current recommendation to" reduce ", with negative growth potential. In the near future JSC "BCC Invest" plans to release a new report on the bank taking into account the published financial results. Analysts JSC BCC Invest also expect the following developments in international markets: - on Russian markets at the end of the week is expected to publish data on the growth of Russian GDP in the first quarter of this year. Expected growth of 4.8%, while similar data for the previous period was at -3.8%. Also, today is expected to announce financial statements of CJSC Severstal for the first quarter of 2010 on International Financial Reporting Standards (IFRS). At the opening of trading today, analysts of JSC "BCC Invest" offers a neutral view of the dynamics of multi-directional, the mood on world stock exchanges. It is possible that at the end of the week players will continue to record profits. - European markets, important macroeconomic publications is expected today. Analysts of BCC Invest JSC are giving the following advice for investors in securities of issuers in internal market: ---------------------------------------------------------------------- Issuer Last price Target Predicted price, code price % Recom- mendation ----------------- ------- ---------- ------ ---------------- --------- Kazkommertsbank KKGB 517 623 +20.50 Hold KKGBp 271 312 +15.13 Hold Halyk Bank HSBK 329 330 +0.30 Hold Bank CenterCredit CCBN 561 777 +38.50 Buy Tsesnabank TSBN 941 737 -21.68 Cut KazMunaiGaz RDGZ 19,001 21,300 +12.10 Hold Kazakhmys PLC GB_KZMS 3,034 3,559 +17.27 Buy ENRC PLC GB_ENRC 2,400 2,642 +10.08 Hold Kazakhtelekom KZTK 13,701 17,800 +29.92 Hold KZTKp 6,201 10,300 +66.10 Buy MREK MREK 910 800 -12.09 Cut ---------------------------------------------------------------------- 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. [2010-05-14]