The stock market for the week: Uralkali again pleasantly surprised

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During the week from 2 to 8 August, the Russian stock market has done everything possible to recover after the collapse of the first trading day of the month. Index Mosuri for the week increased by 0.8% to 2696,69 points, while the RTS index rose the same rate, 0.8% to 1303,8 points.
Meanwhile, the price of Brent crude in the period was slow to recover, and only increased the rate of decline, obvalivat 5.8%, to $57.53 a barrel and breaking down a significant level of support and comfort for producers and consumers of oil corridor of $60 per barrel. Us-China trade conflict, the end which is not visible and the depreciation of the yuan triggered the collapse of the oil.
Meanwhile, a weak growth of the Russian stock market has pulled on itself a “defensive” stocks, primarily mining and gold mining companies, in particular, recommended to us before the shares “the Pole” and paper group and Polymetal Norilsk Nickel; the week of action each of these companies has gained 5-6% of the cost.
The top gainers for the week were shares of Uralkali, has risen in price by 14.4% to RUB 117,72 Growth occurred on the background of the transactions between minority shareholder of the “Uralkali”, company “Sberbank Investment” and the company Rinosco Trading, made the subsidiary of “Sberbank” in June a proposal to purchase her stake in the “BRIC”, which is 10.18% of the capital. Shareholder of Uralkali in June agreed to sell this package at a price at 89.3 RUB over the paper and apparently the deal happened recently. Our short-term target price on shares of Uralkali is RUB 120 per share, the recommendation “hold”.
Outsider trading last week were shares of retailer M. Video, who this week fell by 2.83% to 423,3 RUB per share, against a small growth of the market. Perhaps stocks are falling ahead of the retailer reporting under IFRS, which will be published in late August. Our target price on shares of “M. Video” in the annual horizon is 430 RUB. per share, the recommendation “hold”.
Last week “Gazprom oil” has published the reporting according to IFRS for the second quarter and first half of 2019, which failed to bring the company’s quotes growth. For the second quarter of 2019, revenue for the first quarter of this year grew 7.2% to 628,32 billion rubles., EBITDA in the quarter increased 6.1% to 190 billion rubles, but net profit for the second quarter QoQ fell slightly, by 0.7% to 107,15 billion.
Apparently, the figure disappointed the market as investors are concerned, if it isn’t, therefore, reducing the size of the dividend per share. During the week of the action “Gazprom oil” has fallen in price on 0,56%, to 422 ruble per share. Our target price on shares of “Gazprom oil” — 470 RUB per share at an annual horizon, we recommend you “buy” these securities.
We expect that this week the RTS index will remain in the corridor 1280-1330 points, while the index Mosberg moves to the interval of values 2600-2720 points.
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Natalia Milchakova,
Deputy head,
“Information-analytical center “Alpari”