Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for May 12, 2011

/IRBIS. May 12, 2011/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for May 12, 2011. The analysts are expecting a negative opening on KASE on the negative exterior background. During the day, the KASE index stock quotations dynamics will be also negative and the KASE index would probably end the day with decrease. Analysts of JSC "BCC Invest" expect the following developments in international markets today: - In Kazakhstan, in January - April 2011 industrial output increased by 6.1%. In January-April 2011 compared to same period in 2010, production of coal, natural gas, crude oil and metal ores increased. Has also increased production of engineering products, construction materials, chemical and metallurgical industry products, food and beverage. Production growth was observed in 14 regions of the country. Decline was registered in Pavlodar and South Kazakhstan regions. - RUSAL has announced its interim results for the first quarter of 2011. In general, the company reported good growth in bauxite mining and alumina refining. The main reasons for the growth of the company's revenues were the increase in prices for aluminum and alumina. Thus, with increasing production of aluminum and alumina by 4% and 10% respectively, revenue increased 28% from $2,331mln over the same period in 2010 to $ 2,993 million in 2011. Cash production costs increased by 29.8% from $ 1,452 million in the previous period to $ 1,884 million in the present, which shows a higher rate of growth of production costs than revenues. Significant addition to the net profit was to become a financial income totaled $ 724 million. The increase is mainly due to revaluation of financial derivatives. In particular, long- term contracts for electricity supply have been revised due to changes in the regulation of the electricity market by the Russian government. The Government made it mandatory for companies to supply electricity to retail customers on a grant basis, and has changed some rules, like mandatory participation in the supply of electricity through an agreement that allowed the company to replace some of the contractual amounts of electricity in the long-term contracts. Based on these changes, the Company recognized gains of $ 715 million and the tax effect - $ 143 million. Analysts of JSC "BCC Invest" leave their current recommendation to "buy" with target price of 15.57 HKD per share. - Severstal acquires 25% of the iron ore company in Brazil for $ 49 million. Severstal JCS (RTS: CHMF) acquires 25% of the iron ore company SPG Minerao (Brazil) for $ 49 million, the report of the Russian company said. The company holds licenses to develop iron ore deposits in the state of Amapa in northern Brazil, where resources are estimated at 0.5-1,5 billion tons, iron in the ore - 40-45%. Severstal has also received an option to buy another 50% of the company, which was planned in case of success of project development. The company did not inform the temporal parameters of the project. $ 49 million will be paid in installments depending on progress in its development. Severstal believes in the potential of project in Brazil, estimates future production of iron ore concentrate in the 10-20 million tons. Near fields are railroad and port, but the company is considering its own logistical options. Severstal already owned iron ore mining and greenfield-projects in Karelia, Krasnoyarsk, Liberia, Congo and Gabon. According to analysts of JSC "BCC Invest" this news is moderately positive for the stock quotations of JSC Severstal, since there is no evidence of the transaction, but the general increase in raw material base in the exercise of the option should be well reflected in the fundamentals. Analysts of JSC "BCC Invest" expect the following developments in international markets today: - Today in Russia the data on international reserves and consumer price index is awaited. - Today in France 11:30 (AST) will be published data on the consumer price index, including the harmonized CPI, taking into account the EU. At 14:00 (AST) The European Central Bank will issue a monthly report for May, and at 15:00 (AST) will be published data on Eurozone industrial production. In the UK, 14:30 (AST) will be published data on industrial production and manufacturing industries, as well as the expected publication of estimates of GDP growth from NIESR. - Today, the United States in 18:30 (AST) will publish data on primary and repeat applications for unemployment benefits, the Producer Price Index and retail sales. At 19:45 (AST) there will be published data on the index of consumer comfort from Bloomberg, and 20:00 (AST) - on commodity stocks. Today the reports of Cisco Systems Inc, Nissan Motor Co Ltd, Allianz SE, Enel SpA, Repsol YPF SA, RWE AG, Vivendi SA, Symantec Corp, and others will be presented. Analysts of BCC Invest JSC are giving the following advice for investors in securities of issuers in internal market: ---------------------------------------------------------------- Closure Target Potential, Issuer Code price price % Recommenda- tion ---------------- ------- --------- ------ ---------- ----------- Kazkommertsbank KKGB 475 583 +22.74 Neutral KKGBp 210 196 -6.67 Neutral Halyk Bank HSBK 345 415 +20.29 Hold BankCenterCredit CCBN 495 646 +30.51 Hold Tsesnabank TSBN 865 1,030 +19.08 Neutral EP KMG RDGZ 19,401 20,500 +5.66 Hold Kazakhmys PLC GB_KZMS 3,150.00 3,870 +22.86 Buy ENRC PLC GB_ENRC 2,100 2,550 +21.43 Hold Kazakhtelecom KZTK 19,199.99 Review KZTKp 9,000 9,300 +3.33 Hold MREK MREK 1,100 1,130 +2.73 Hold ---------------------------------------------------------------- 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. [2011-05-12]