Market Overview: Russian Stock Market RTS 2011, wk.

11
The 11th trading week of 2011 is over. This week was rather successful for Russian Stock
Market as RTS index rose by 0.85% closing on Friday at 1962.23 points. As it was expected RTS
index started to decline on Monday due to some pressure on market and events happening in Japan.
Till Tuesday RTS lost 1.96% of its value when it suddenly experienced recovery when a slight
increase started. Overall fluctuations were insignificant and on Wednesday RTS index started to
rise even more rapidly. The growth rate changed on Friday becoming tenuous. The biggest decline
experienced telecommunication and consumer good and retail trade industry shares (-2.59%,
-2.40%). Metal industry had quite the opposite tendency compared to the previous week it
experienced 0.76% growth this week. Different aspects can explain growth of RTS index this
week. Current situation in Libya will keep oil prices from considerable reduction, which will
positively affect Russian economy. Furthermore, other country stock markets also experienced
positive tendency in the value of the stock. Due to the lack of definite news about the disaster in
Japan uncertainty appears among the market participants, which certainly entails a strong increase
in volatility. This week winners are Gazprom (GAZPS) and Norilsk Nickel (GMKNS) they
gained 6.92% and 5.66% respectively. Only two companies in the industry faced decrease in their
value: these were last week’s winner Tatneft (TATNS) which lost 3.40% and Surgutneftegaz
(SNGSS), which had very big decline in its stock value, it dropped by 8.53%.

Chart 1. RTSI index in week 10. Source tikr.ru

Gazprom(GAZPS) is the world’s largest extractor of natural gas, as well as the largest
Russian company. At the beginning of this week price for Gazprom share was equal to 5.29 EUR,
during Monday prices rose by 3.56 %. From Wednesday till Friday price per share had also a
serious growth, resulting in 3.29 %. On Friday price had a small decline, due to too rapid growth
before. At the end of the week price per share was equal to 5.65 EUR. As a result, Gazprom faced

1 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in
it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Market Overview: Russian Stock Market RTS 2011, wk. 11
a 6.92% rise in price of its shares. The growth in price was caused by nuclear accident in
Fukushima, because many investors and traders were predicting positive changes of prices in oil
and gas market. Moreover, market started to recover its positions after 10th week’s drop which was
caused by earthquake in Japan

Chart 2 GAZPS in week 11. Source: tikr.ru

From Monday till Tuesday Nornikel (GMKNS) faced strong fluctuations between -0.51 to
+4.14% compared to beginning of Monday. It was mainly caused by lawsuit from United
Company RUSAL, connected with dispute over shares of OGK-3, one of the Russian power
companies. On Thursday price per share went up due to announcement, that lawsuit will be
postponed till the 8 of April, and interest in shares of Nornikel from one of the biggest
metallurgical holdings in Russia – Metalloinvest Management Company LLC. As a result
Nornikel ended the week with 5.66% growth in price per share, compared to Monday.

2 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in
it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Market Overview: Russian Stock Market RTS 2011, wk. 11

Chart 3 GMKNS in week 11. Source: tikr.ru

The biggest downturn was experienced by Surgutneftegaz (SNGSS). Share prices

decreased dramatically by 8.53%. On Monday of 11th week you could buy share for 0.80 EUR, and
already on Friday price was only 0.73 EUR. Decrease was caused by Federal Antimonopoly
Service’s announcement. They are considering about suing SNGSS for setting too high prices for
oil. However, FAA final decision is not announced yet. Also, some investors claim that SNGSS’s
dividends are too low, increase in dividend percentage would positively affect share price’s trend.

3 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in
it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Market Overview: Russian Stock Market RTS 2011, wk. 11

Chart 4 SNGSS in week 11. Source: tikr.ru

Last week’s winner Tatneft (TATNS) has faced completely opposite trend this week.
TATNS is the second biggest loser, stock price decreased by 3.4%. In the beginning of the 11 th
week prices for TATNS share was 4.44 EUR, it fell to the level of 4.29 EUR. Such decline might
be result of planned project “60-66”. Minister of Energy wants to increase export taxes for dark
mineral oil products, from 46.7% to 66%. Denis Borisov, analyst from Bank of Moscow, estimates
that Tatneft will lose about 200 million of their profit this year.

Chart 5 TATNS in week 11. Source: tikr.ru

4 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in
it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Market Overview: Russian Stock Market RTS 2011, wk. 11
Overall, the tension about the situation in Japan is gradually decreasing and next week the
level of stress will be lower. However, the happenings in the Middle East and North Africa are still
tense and a new hot-spot has appeared – Bahrain, where locals are expressing their dissatisfaction
about the political regime, which can support oil prices. At the same time Libya’s government
intends to begin negotiations with the opposition, but investors have diverse attitude about this. On
the one hand, it is a positive factor for development of the conflict, but on the other, this causes
decrease in oil prices. If the situation in Libya will stabilize, oil and gas companies may lose value.
Japan’s case with the nuclear plant provokes some negative sentiment and ambiguity, but when the
situation will be resolved, markets will grow. Meanwhile, the domestic markets have shown
stability and the prospect for next week is moderately positive. Russian stock market will move in
accordance with events in the Middle East and Japan. Many players are expecting recovery of Japan
and increasing demand for different goods and therefore growth opportunities for Russian
companies.

Review by: Laura Laube, Eriks Petrovs, Valerijs Rezvijs, Eduards Sidorovics

5 Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained in
it. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.