Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for June 6, 2011

/IRBIS. June 6, 2011/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for June 6, 2011. The analysts are expecting a mixed and multidimensional opening on KASE on the ambiguous exterior background. During the day, the KASE index stock quotations dynamics will be depending on the mood of investors from external markets. Analysts of JSC "BCC Invest" expect the following developments in international markets today: - The number of strikers in the Ozenmunaygaz and Karazhanbasmunai is reducing. "The number of protesters in the OMG decreased by 724 persons, mostly drivers of technological transport. Absenteeism of machinery was reduced to 52%. The company provides security and delivery to the work of employees who are not participating in the protest," - says the dissemination of information. However, the company continues the termination of employment contracts with those who refuse to go to work. Currently 62 people were laid off. In Karazhanbasmunai number of strikers dwindled to 90 people. As reported May 26, the part of workers of Ozenmunaygaz in Zhanaozen (Mangistau region of West Kazakhstan), especially the transport industry, not went to work. Fixed partial house arrest machinery necessary for the implementation of capital and underground repair of wells. The workers are demanding higher wages, including by different raising factors. The Company believes that the demands of protesters were unfounded, as confirmed by a court of Zhanaozen on May 24. In addition, the city administration has been granted permission to conduct this campaign. Thus, the protest was illegal, the company emphasized. According to analysts of JSC "BCC Invest", the situation in the PF Ozenmunaygaz and Karazhanbasmunai adversely affects the value of KMG EP and, consequently, the value of its shares and depository receipts. In this case, a negative impact on both current operational and financial results due to possible disruption of production, preparation and transportation of oil and on the future performance due to delays in drilling, overhaul and servicing of wells. It is also likely bringing an action on the part of former and current employees of the company and, accordingly, court proceedings between the company and employees. However, this situation is not out of the ordinary, but merely indicates the high risks of investing in stocks of companies from countries with developing or transitional economies. Analysts of JSC "BCC Invest" believe that the likely negative consequences for KMG are currently already included in the prices of shares and depository receipts, and further reduce their quotes in the near future is unlikely (assuming constancy of other factors, especially oil prices) . JSC "BCC Invest" leaves in place its current recommendation to "buy" with target prices of 20,500 KZT per share and $23.60 per GDR. - Halyk Savings Bank of Kazakhstan has announced its consolidated financial results for the first quarter of 2011. Key figures for the 1 st quarter 2011: net income amounted to 10.6 billion tenge for the first quarter of 2011 increased by 4.2% to 10.2 billion tenge for the fourth quarter of 2010 and decreased by 6.4% from 11.4 billion . tenge for the first quarter of 2010, assets increased by 7.2% due to customers increased by 10.3%, including the means of legal persons by 12.8% and individuals' funds at 5.5%, current accounts rose by 41.0%, including current accounts of legal entities at 50.2% and current accounts of individuals at 6.3%, loans to customers, gross remained almost at the same level compared to the end of 2010; debt securities issued increased by 29.4%; capital fell by 7.8% Net interest income decreased by 2.6% to 10.5 billion tenge from 10.8 bln in the first quarter of 2010, allocations to impairment decreased by 15.3% to 11.3 billion tenge from 13.3 bln in the first quarter of 2010, income from fees and commissions (excluding income from the pension fund and asset management services) grew by 24.0% to 6.6 billion tenge from 5.3 bln in the first quarter of 2010, commission income from the pension fund and asset management increased by 46.4% to 5.0 billion . KZT 3.4 bln for the first quarter of 2010 and by 18.4% from 4.3% in the fourth quarter of 2010, operating expenses increased by 1.1% to 10.5 billion tenge for the first quarter of 2011 from 10.4 billion . tenge for the first quarter of 2010 and decreased by 22.4% to 13.6 billion tenge for the fourth quarter of 2010, net interest margin before provisions for impairment losses decreased to 4.4% from 5.2% in the first quarter of 2010 , the ratio of operating expenses to operating income before provisions for impairment amounted to 28.7% for the first quarter of 2011 compared with 28.6% for first quarter 2010 and 34.8% for the fourth quarter of 2010; adequacy ratio Tier I capital, calculated in accordance with the guidelines of Basel, was 16.8%, capital adequacy ratio, calculated in accordance with the guidelines of Basel, was 20.6%, the ratio of deposits to loans to customers fell to 0.69h with 0.77x at the end of 2010; rate redundancy was 19.5%, return on average equity was 13.6% for the first quarter of 2011 (annualized) compared with 11.8% for 2010, return on average assets was 1.9% for the first quarter of 2011 (year terms), compared with 1.7% for 2010. Analysts of JSC "BCC Invest" believe that the reporting is positive for equity securities quotations of Halyk. At first glance, analysts of JSC "BCC Invest" see the decline in yield on the bank's net interest margin ratios, but this decrease is primarily due to increased liquidity, in particular, significantly increased debt capital, at the expense of customer deposits and placement of Eurobonds worth $ 500 million. JSC "BCC Invest" expects liquidity flowing into a more profitable balance sheet as at the moment a significant part of funds invested in investment securities. Analysts of JSC "BCC Invest" leave their current recommendation "HOLD" with target price of KZT 415 per share. "BCC Invest" analysts are expecting the following events on international markets today: - In near two days in Russia the data on inflation and consumer price will be published. - Today at 14:30 (AST) will be published the investors trust index from Sentix for Eurozone, and at 15:00 (AST) - the PPI for Eurozone. - Today in USA no important economic statistics will be published. Today the reports of Hutchison Port Holdings Trust, MMC Norilsk Nickel OJSC and others will be presented. Analysts of BCC Invest JSC are giving the following advice for investors in securities of issuers in internal market: ------------------------------------------------------------- Closing Target Potential, Issuerт Code price price % Recommen- dation ----------------- ------- ------- ------ ---------- --------- Kazkommertsbank KKGB 449 583 +29.84 Neutral KKGBp 198 196 -1.01 Neutral Halyk Bank HSBK 328 415 +26.52 Hold Bank CenterCredit CCBN 518 608 +17.37 Buy Tsesnabank TSBN 865 1,030 +19.08 Neutral KazMunaiGaz RDGZ 18,000 20,500 +13.89 Hold Kazakhmys PLC GB_KZMS 3,050 3,870 +26.89 Hold ENRC PLC GB_ENRC 2,050 2,550 +24.39 Hold Kazakhtelekom KZTK 19,600 Review KZTKp 9,500 9,300 -2.11 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. [2011-06-06]