Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for May 20, 2010

/IRBIS, May 20, 2010/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for May 20, 2010. Analysts of JSC "BCC Invest" indicate that yesterday the shares of ENRC PLC and Kazakhmys PLC on the London Stock Exchange fell - respectively 6.50% (9.93 pounds) and 6.72% (11.38 pounds). Yesterday Depositary Receipts of Halyk Bank, Kazkommertsbank and KMG in London caved in - at 9.83% ($7.34), 6.37% ($6.32) and 7.33% ($20.85), respectively. Negative closing trades in Europe and the U.S. yesterday and mixed dynamics in Asia today, according to analysts of JSC "BCC Invest" it will not give reason for the growth of Kazakhstan's stock market. Analysts expect a negative opening of trading on KASE, but during the day the market can change its direction of motion. The current correction in the market creates opportunities for open positions in the long term. Analysts JSC BCC Invest also expect the following developments in international markets: - Bank CenterCredit (BCK) for the first quarter has increased assets on 8.6%. Assets of the Bank of BCC at April 1, 2010 amounted to KZT1.261 trillion (current 146.77/$1) against KZT1.161 trillion at the beginning of this year, stated in its consolidated financial statements under IFRS. Thus, assets have grown on 8.6%. The obligations of the bank during the period rose to KZT1.144 trillion from KZT1.063 trillion, own capital - up to KZT117.155 billion from KZT97.622 billion, authorized capital - up to KZT69.847 billion from KZT52.710 billion. BCK in January-March 2010 had received a net profit of KZT1,952 billion against the net profit of KZT9.367 bln in January-March 2009. According to analysts of JSC "BCC Invest", published that financial results are neutral for the bank's shares, since the market there was no consensus forecast for the reporting period. Despite the fact that the financial results of JSC Bank CenterCredit were slightly worse than analysts' expectations of JSC "BCC Invest", however, analysts are looking favorably on the bank's shares in the long run, as analysts said these securities at this time are very much underestimated. Analysts of JSC "BCC Invest" retain the recommendation of "BUY" on ordinary shares of JSC Bank CenterCredit, but plan to shortly review the model against published data and issue a new report with updated forecasts. - Board of Directors approved the KazakhGold capital costs for the year 2010-2016 to $714-863 million, the Board of Directors of the company KazakhGold ("Daughter" Polyus-Gold) has approved total capital expenditures for 2010-2016 in the amounts of $714 million in the base scenarios of up to $863 million in an optimistic, said the company. The development strategy of Kazakhstan's assets up to 2020 assumes the modernization of existing production capacity expansion from 0.97 million tons to 1.3 million tons of ore per year and the construction of the Central Iron and Steel Works (DMC). The cost of upgrading and expansion of production in 2010- 2013 approved at $202 million, including $119 million will be used to increase the underground and open pit ore, $83 million - to upgrade existing plants and construction of DMC. In the case of successful completion of exploration work in 2011, the company expects to in 2013 - 2016 construction of new plants at Aksu, Bestyube and Zholymbete total capacity from 4.7 million to 9 million tons per year (at the base and high scenarios, respectively) and the object heap leaching with a total volume of processing from 2.2 million to 4.3 million tons of ore per year. The corresponding capital cost in the baseline scenario are assumed at $512 million, in an optimistic - $661 million baseline scenario assumes an increase in output by 2016 up to 500 thousand ounces of gold, optimistic - to 640 million ounces. Fixed assets KazakhGold, the largest gold producer in Kazakhstan - the deposit Aksu Bestyube and Zholymbet located in the northern part of the country. These three fields combine stocks about 60 million ounces, over the past 2 years have produced more than 300 million ounces of gold. On the field Aksu has two gold- mining plant (ZIF) and heap leach facility at Bestyube - mill and heap leaching, to Zholymbete - mill. In addition, all three fields are construction of additional facilities (up to 2 million tons of ore each) for processing of tailings Polyus acquired a controlling stake in Kazakhstan's companies in August last year. According to analysts of JSC "BCC Invest" This message is moderately positive for the GDR KazakhGold, because the revised development strategy will help Restoration Company in the gold market, and increase the fundamental value of the organization. However, at this time analysts do not consider these securities separately from the parent company, so the recommendation of the GDR KazakhGold at the level of "neutral." Analysts of JSC "BCC Invest" positively look at ADRs in Polyus Gold and plan to revise the model after clarifying with the reverse takeover of Kazakh subsidiary company. Analysts JSC BCC Invest also expect the following developments in international markets: - on Russian markets today is expected to yield regular data on the state of country's international reserves in U.S. dollars last Friday. Among corporate events are not expected to yield important news, so the greater impact is likely to have foreign background. Today, at the opening of trading analysts of JSC "BCC Invest" expect continued negative sentiment pledged dynamics of European and U.S. indices yesterday. Japanese market, slowly declining against the data on GDP growth for the first quarter of 2010, which will also put pressure on the course of bidding, however, probably Russian securities will not depreciate at the same pace as yesterday, since the ambient background at the moment not so significant. - European markets today will be index data of producer prices in Germany for April, which is expected to grow by 0.6%. In addition, investors will continue to monitor the local corporate events, and news from Asia, which published today the value of GDP growth in Japan. - on U.S. market today will be data on weekly unemployment benefits, as well as the index of business activity, calculated by the Philadelphia Fed, in May. In addition, today released the index of leading indicators for April, which is expected to increase minimally. 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 480 623 +29.79 Hold KKGBp 271 312 +15.13 Hold Halyk Bank HSBK 280 330 +17.86 Hold Bank CenterCredit CCBN 550 777 +41.27 Buy Tsesnabank TSBN 941 737 -21.68 Cut KazMunaiGaz RDGZ 18,600 21,300 +14.52 Hold Kazakhmys PLC GB_KZMS 2,500 3,559 +42.36 Buy ENRC PLC GB_ENRC 2,150 2,642 +22.88 Hold Kazakhtelekom KZTK 13,400 17,800 +32.84 Hold KZTKp 6,600 10,300 +56.06 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. [2010-05-20]