Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for June 15, 2011

/IRBIS. June 15, 2011/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for June 15, 2011. The analysts expect mixed opening of trades on ambiguous exterior background. During the day, according to forecasts of "BCC Invest" JCS, the dynamics of trades on the local stock market will be moderately positive, and the KASE index will end the day with slight increase. Analysts of JSC "BCC Invest" expect the following developments in international markets today: - Positive balance of foreign trade of Kazakhstan in January-April increased by 1.6 times. Trade surplus of Kazakhstan in January-April 2011 amounted to $ 17.3 billion, 1.6 times more than in January-April 2010, Statistics Agency reported. Foreign trade turnover in January-April 2011 compared with January-April 2010 grew by 41% to $ 36.6 billion, including exports of $ 26.9 billion (47.3% increase), imports - $ 9.7 billion (up 26% more). Exports to countries of the Customs Union was during the period of $ 2 billion 824.6 million (65.8% increase) and import - U.S. $ 4 billion 272.6 million (38.6% more). The main buyers of Kazakh products in the reporting period were Italy - 15% (of total exports of the country), China - 13.8%, and Russia - 10.3%. A month earlier, Italy also has topped the list with a share of 16.3%, followed by China and also Russia - 14.4% and 10.3%, respectively. The main importers of Kazakhstan during the reporting period as a month ago, were Russia - 42.8% (in January-March, 45.8% of total imports), China - 13% (12.1%) and Ukraine - 5.3% (5.2%). - Kazakhstan's imports in April went up by 13.7%, export - by 47.4%. In Kazakhstan, in April 2011 compared to the same period last year, prices for imported goods rose by 13.7%, exported - by 47.4%, indicated in the circulated report of the State Agency for Statistics. According to statistical data, in particular, imported raw materials increased in price by 10.2% exported - by 51%. Prices of imported semi-finished products grew by 13.4% exported - by 34.9%. Imported finished goods rose during the reporting period by 13.1% exported - by 32.6%. According statvedomstva, increase export prices for the month recorded for natural gas by 15%, coal - by 14.5%, ferroalloys - 7.7%, aluminum - 3.9%, oil - by 3.7%, petroleum products - by 3.4%, zinc - 2.6%, their reduction - on a propane- butane liquefied by 1.5%, cement - by 1.1%. Prices on the skin were higher by 14.2%, cotton - by 13.8%, wool - by 5.1%, tobacco - by 0.6% for grain - down 3.2%. Revenue from imported fish went up by 14.6%, coffee - by 8.2%, paints and varnishes - 7.6%, drugs - by 7.5%, poultry - by 5.2%, oil - by 3.1%, sugar - 2.9% margarine fell by 9.1%, footwear - by 3.9%, tea - by 1%. According to analysts of JSC "BCC Invest", growing trade surplus of Kazakhstan will continue to contribute to an increase in the current account balance and balance of payments in general, which will put pressure on the currency - tenge toward consolidation, which, according to our forecasts, after summer lull will continue this fall. - S & P raised the ratings of Severstal to 'BB', outlook - "stable". Ratings Services Standard & Poor's on Tuesday raised the long-term credit rating of Russian steel company OAO Severstal to 'BB' from 'BB', said the agency. At the same time, the national rating was upgraded from "ruAA-" to "ruAA". Ratings outlook - "stable". Rating unit of Severstal Russian Steel upgraded to "BB / ruAA", the forecast - "stable". Rating Severstal Columbus is affirmed at "B", his prognosis improved from "stable" to "positive." "The upgrade reflects the high rates of profitability and financial performance of Severstal, which the company demonstrated in 2010-2011. And that we expect to continue in the coming years" - was said in a press release from S & P. According to the agency, the sale of unprofitable production assets in North America and Europe to stop the erosion of profits of the underlying assets of Severstal. Thanks to stabilize markets steel and high world prices for raw materials increased profits by Severstal, which makes high creditworthiness. Positive impact on the ratings of Severstal also provide reasonable fiscal policy, low cost in Russia, the vertical integration of mining its own raw materials, as well as a large proportion of companies in the Russian market. "We expect that even in the face of lower prices and profitability characteristics of the creditworthiness of" Severstal "will remain at a fairly high level and the ratio of" adjusted debt / EBITDA "will remain at approximately 1.5 x the average for the industry cycle, due to their low cost ground Metallurgical plant Severstal in Russia ", - the document says. According to analysts, S & P, the ratings of "Severstal" is currently still hindering the risks of cyclical capital-intensive steel industry is highly competitive, the exposure of Severstal to risks associated with doing business in Russia, where the main assets that generate cash flow, and also the company's plans to significantly increase capital spending (which, according to S & P, can limit the amount of free cash flow), the concentrated asset base and the desire to acquire assets. Current rating provides for the acquisition of small assets and payment of dividends in accordance with company policy, which sets dividend of 25% of the profits. S & P admits the possibility of increasing the company's ratings within the next year or two, if the conditions in the markets of steel and raw materials remain favorable for the "Severstal" and if the company will refrain from the acquisition of major assets and maintain a high enough credit characteristics. Ratings could be lowered in case of significant deterioration of conditions in the steel industry (which is not included in the baseline scenario the agency over the medium term), generating stable negative value FOCF, acquisition of major assets financed by debt, or large payments to shareholders. - Moody's upgraded the rating of Severstal from Ba3 to Ba2, outlook - from negative to stable. International rating agency Moody's upgraded the corporate rating of JCS Severstal (RTS: CHMF) to "Ba2" from "Ba3." According to a press release from the agency, the ratings outlook upgraded to "stable" from "negative." "Today's rating actions reflect the fact that Severstal has completed the sale of unprofitable foreign assets, thereby achieving more efficient and highly profitable structure of operations", - the report says Moody's. In addition, the company's results for 2010 and I quarter of 2011 showed a significant improvement of its work, including a significant resurgence in profitability. Moody's expects that Severstal will retain the current competitive position due to the high degree of vertical integration and complete self-sufficiency of its Russian subsidiary in terms of iron ore and coal. Analysts Jof SC "BCC Invest" believe that the reported increased ratings of Severstal's leading rating agencies will have a positive impact on share prices and GDRs. Analysts of JSC "BCC Invest" leave their current recommendation to "buy" with target price of $ 23.25 per depositary receipt. "BCC Invest" analysts are expecting the following events on international markets today: - In the next two days Russia is expected to publish data on consumer price and producer prices indices. - Today in France at 11:30 (AST) will be published data on the consumer price index. In the UK, at 14:30 (AST) will be published data on the level of applications for unemployment benefits from the change in the number of unemployed, according to the average wage and the unemployment rate by ILO. At 15:00 (AST) will be published data on industrial production of the Eurozone. - Today, the United States at 17:30 (AST) will publish data on applications for mortgages from an MBA, 18:30 (AST) - the consumer price index and production index Empire Manufacturing. At 19:15 (AST) will be published data on industrial production and capacity utilization, and 20:00 (AST) - an index of the housing market from the NAHB. Today reports of MMC Norilsk Nickel OJSC, Inditex SA, Finisar Corp., and others will be heard. Analysts of BCC Invest JSC are giving the following advice for investors in securities of issuers in internal market: ------------------------------------------------------------- Closing Target Potential, Issuer Code price price % Recommen- dation ----------------- ------- ------- ------ ---------- --------- Kazkommertsbank KKGB 427 583 +36.53 Neutral KKGBp 188 196 +4.26 Neutral Halyk Bank HSBK 318 415 +30.50 Hold Bank CenterCredit CCBN 500 608 +21.60 Buy Tsesnabank TSBN 942.85 1,030 +9.24 Neutral KazMunaiGaz RDGZ 18,150 20,500 +12.95 Buy Kazakhmys PLC GB_KZMS 3,060 3,870 +26.46 Buy ENRC PLC GB_ENRC 1,974 2,550 +29.18 Buy Kazakhtelekom KZTK 19,600 Review KZTKp 9,550 9,300 -2.62 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. [2011-06-15]