Market reviews and recommendations of BCC Invest JSC (Kazakhstan) analysts for July 28, 2011

/IRBIS. July 28, 2011/ - BCC Invest JSC has provided IRBIS with a survey of main events, market reviews and investment ideas for July 28, 2011. The analysts expect negative opening of trades on KASE amid decrease in shares and depository receipts of Kazakhstani issuers the day before in London. During the day, according to the forecasts, the dynamics of stocks included into KASE index, will remain mixed and multidimensional, and KASE index will end the day with decrease. Analysts of "BCC Invest" JCS expect the following developments on Kazakhstani market today: - JSC "Exploration Production "KazMunaiGas"("KMG EP"or the "Company") reports on developments in connection with illegal protest action, which takes place in the production branch Ozenmunaygaz (OMG) in Zhanaozen (Mangystau region). Company together with authorities of Mangistau region has made every effort to help to stabilize the company and has repeatedly called on members of illegal protests to return to work without any threat of persecution by the employer. We note with regret that despite all the advocacy and moratorium the dismissals illegal protest action continues, and of the remaining protesters no desire to establish a constructive dialogue. After the expiration of the moratorium on July 25, the number of participants in illegal protests has decreased somewhat, but as of July 27, 748 do not come to work. In the continuation of the protests are losing in oil production. Today, accumulated during the illegal strike gap with the production plan of 366 thousand tons. Given that the recovery level of daily production will take time, the expected deviation from the plan for the year may be about 800 thousand tons, or 6% of the consolidated volume of KMG EP's production (including shares in jointly controlled entities where it is expected some over-fulfillment of the plan). This leads to significant financial losses, primarily for the state, who is also a recipient of tax payments and the largest shareholder of the Company. Since management is obliged to protect the interests of all shareholders, KMG EP has been forced to initiate a right enshrined in the Labor Code of Kazakhstan, on termination of employment with those who refuse to perform their job duties. However, the Company still continues to educate and refrained from massive layoffs in order to allow the maximum number of employees participating in an illegal strike only under pressure from its organizers, to keep their jobs. For 26 and 27 July to terminate the employment relationship with 30 employees of OMG. Since the beginning of illegal protests on the manufacturing branch were dismissed 373 people. At the same time the personnel department of industrial branch "Ozenmunaygaz" has started to review about 3,400 CVs received from local residents for the vacated jobs. At present the design to work on 30 professionals to replace sacked. Work on the dismissal of employees who violate labor discipline, and acceptance in their place new staff is also continuing in the joint venture Karazhanbasmunai. The company is confident that the police will be able to ensure the safety and rights of all inhabitants of the region, including both members of illegal protests, and willing to work in the company. According to the JSC "BCC Invest", the situation on the labor conflict in the PF Ozenmunaygaz continues to adversely affect the value of the company and the dynamics of the quotation of its shares and depository receipts. However, we believe that this situation cases are already embedded in current stock prices and depositary receipts of KMG EP, and the resolution of the conflict will boost prices. Analysts of JSC "BCC Invest" support the recommendation to "buy" on shares and depositary receipts of KMG EP with target price of 20,500 tenge per share and $ 23.60 per GDR. Analysts of JSC "BCC Invest" expect the following developments on international markets today: - Russia is expected to publish data on international reserves. - in Germany 13:55 (AST) to be published data on the unemployment rate. At 15:00 (AST) to be published data on euro area business climate index, the consumer, economic and industrial confidence. In the UK, at 16:00 (AST) CBI will publish data on sales. - in U.S. at 18:30 (AST) to be published data on initial and repeat applications for unemployment benefits, at 19:45 (AST) - an index of consumer comfort from Bloomberg, and at 20:00 (AST) - on pending transactions on home sales. - today the following enterprises will be reporting: Exxon Mobil Corp, Vale SA, Royal Dutch Shell PLC, Statoil ASA, Hyundai Motor Co, Komatsu Ltd, Sony Corp, Nintendo Co Ltd, Taiwan Semiconductor Manufacturing Co Ltd, Toshiba Corp, Lukoil, Siemens AG, Sanofi, Telefonica SA, Volkswagen AG, BASF SE, Bristol-Myers Squibb Co, EI du Pont de Nemours & Co, Potash Corp of Saskatchewan Inc, Bayer AG, Barrick Gold Corp, MetLife Inc, Colgate-Palmolive Co, AstraZeneca PLC, France Telecom SA, Credit Suisse Group AG, Banco Bilbao Vizcaya Argentaria SA, Danone, Southern Copper Corp, Yandex NV and the others. 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 380 545 +43.42 Hold KKGBp 167 168 +0.60 Neutral Halyk Bank HSBK 312.01 415 +33.01 Hold Bank CenterCredit CCBN 495 608 +22.83 Buy Tsesnabank TSBN 942.85 1,030 +9.24 Neutral KazMunaiGaz RDGZ 17,190 20,500 +19.26 Buy Kazakhmys PLC GB_KZMS 3,249 3,500 +7.73 Hold ENRC PLC GB_ENRC 1,915 2,200 +14.88 Buy Kazakhtelekom KZTK 19,850 Review KZTKp 9,210 9,300 +0.98 Hold MREK MREK 3,000 1,130 -62.33 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. [2011-07-28]