Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for May 16, 2011

/IRBIS. May 16, 2011/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for May 13, 2011. The analysts are expecting a negative opening on KASE on 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: - Kazakhmys actively promotes the IPO in Hong Kong. Vladimir Kim said at the annual general meeting of shareholders in London that the IPO will help the company gain access to cheaper and a major source of funding for multibillion projects to expand production. - Kazakhmys may raise $ 600 million during the IPO in Hong Kong. Hong Kong Economic Journal reported that Kazakhmys PLC, Kazakhstan's copper producer, plans to raise $ 600 million during the IPO in Hong Kong, without giving a source. The company may begin selling shares on the Hong Kong Stock Exchange on June 7 this year, according to a report of HKEJ. According to analysts of JSC "BCC Invest", the news is moderately positive for the stock quotations of Kazakhmys PLC, as a secondary stock offering in Hong Kong is expected by market for a long time. On May 13 the annual general meeting of shareholders of Kazakhmys PLC was held, in which Eduard Ogai was elected, and Vladimir Kim, Oleg Novachuk and Lord Renwick were re-elected to the board of directors. Also at the AGM approved the financial statements for the year 2010, the final dividend and a report on directors' remuneration for the year 2010, actually, where the company's plans were announced regarding the placement of shares. Positive moment may become solve of uncertainty regarding the project Aktogai (with a design capacity of 100 thousand tons of copper per year), as hitherto it's not known on what scheme the project will be run. Recall that in the recent time the alleged partner in the development of an asset was China's Jinchuan Group Ltd, a large company whose main activity is mining and processing of nonferrous metals, with which the agreement of understanding was conducted. However, due to continuing uncertainty Kazakh company reported that it was considering various options for raising finance, including a secondary stock offering in Hong Kong as a more interesting area because it is China which is a major buyer of its manufactured products. Analysts of JSC "BCC Invest" leave their current recommendation to "buy" with target price of ? 16.31 per share on the LSE and the 3,870 th - at KASE. - The Board of Directors of Norilsk Nickel declined initiatives of Rusal on control over transactions of subsidiaries. "In general, proposals are to establish control of the board of directors of all transactions and actions taken in both the company and its subsidiaries and dependent companies (SDCs), pending the appointment of managerial personnel of SDC" - explains Norilsk Nickel, according to which these initiatives are not provided for by Russian legislation. These changes Rusal proposes to reflect in the statutes of Norilsk Nickel and its subsidiaries. According to Norilsk Nickel, it would lead to intolerable bureaucratic burden on the board of directors: "In practice, this would lead to the fact that the board of directors of the authority conducting the strategic management of the company, would effectively replace and duplicate the functions of executive, operational management , which contradicts the basic principles of corporate governance." Rusal believes that the information in the statement of "Norilsk nickel" on the results of the board of directors is not true. "This statement distorts the essence of the proposals Rusal issued to the board of directors" - say in the company, claiming that "all proposals Rusal aimed at progressive improvement of corporate governance are in accordance with international standards." "First of all, the aim of our proposals is to increase transparency in Norilsk Nickel for the members of the Board of Directors, which meets world standards of public companies," - a spokesman said. In particular, he said, it is about enabling the board of directors to approve the transactions of key subsidiaries within the group Norilsk Nickel, as the business itself OJSC MMC Norilsk Nickel is not the only business of the company". Also, the Board of Directors in accordance with our proposals should be able to obtain information on key transactions of group of companies Norilsk Nickel to be consolidated in accordance with IFRS and to participate in the approval of transactions to repurchase its own shares, "- said a spokesman for Rusal. In addition, the aluminum company proposed change in the Norilsk Nickel budgeting process, which is now limited to Russian assets, and, according to Rusal must include all assets and consolidated in accordance with IFRS. "To this end, we proposed to study the situation on the budget, as well as the possibility of changes in Statutes aimed at increasing transparency of transactions of subsidiaries "- he added, noting that all offers have full compliance with Russian legislation," that if confirmed by the independent legal profession. "Rusal has long worried about lack of control of the largest deals in the subsidiaries of Norilsk Nickel to the Board of Directors. It is the subsidiaries of Norilsk Nickel which made the deals, which Rusal considers aimed at strengthening the position of conflict with the aluminum company shareholder - holding "Interros" - and loyal to Interros management. According to analysts of JSC "BCC Invest", the news is neutral for Stock Quotes of Norilsk Nickel and UC RUSAL. Analysts of JSC "BCC Invest" leave its current recommendation to "buy" on shares of UC RUSAL with a target price 15.57 HKD per share. The analysts of "BCC Invest" are expecting the following events on international markets today: - In next two days the data on GDP is to be published in Russia. - Today in Italy at 11:30 (AST) the data on trade balance will be published, at 15:00 (AST) - on consumer price index, including harmonized CPI including EU countries. At 15:00 (AST) - the Eurozone data on CPI and trade balance. - Today in USA at 18:30 (AST) the industrial index Empire Manufacturing will be published, at 19:00 (AST) - the data on net volume of purchase of long-term securities, and at 20:00 - on accommodation index by NAHB. Today the reports of Samsung Electronics Co Ltd, Mitsubishi UFJ Financial Group Inc, Lowe's Cos Inc and others will be heard. 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 469.73 583 +24.11 Neutral KKGBp 210 196 -6.67 Neutral Halyk Bank HSBK 355 415 +16.90 Hold BankCenterCredit CCBN 515 646 +25.44 Hold Tsesnabank TSBN 865 1,030 +19.08 Neutral EP KMG RDGZ 19,400 20,500 +5.67 Hold Kazakhmys PLC GB_KZMS 3,000 3,870 +29.00 Buy ENRC PLC GB_ENRC 2,087.57 2,550 +22.15 Hold Kazakhtelecom KZTK 19,190 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. [2011-05-16]