Russian Daily Monitor

Sibneft sets Sept.12 AGM

Sibneft
,s Board of Directors has set Sept.12 as the date for its AGM, with
a cut-off date of Wednesday, July 27 (including the right for a USD
0.485/share dividend). The Board also approved the AGM agenda, including
amendments to the company
,s charter that would require any bidder for 30%
or more of the company
,s stock to also make an offer to other shareholders
at market price.
With Gazprom emerging as a likely bidder, speculative demand could be felt
in the stock as there is hope for a juicy buy-out offer
) although we are
sceptical about this. We would not even be surprised if Gazprom made moves
to reduce Sibneft
,s perceived value. Meanwhile, as the stock will trade
ex-dividend on MICEX on Thursday, its price could sag, as it did on RTS on
Wednesday.

Court Won
,t Hear MTS dispute

A court has refused to hear a case over a disputed 3% stake in MTS. A
shareholder of VAST, which owns 3% of MTS, was hoping to liquidate VAST by
means of a court decision in order to receive 1.5% of MTS. The court
,s
refusal is positive for AFK Sistema, the controlling shareholder of MTS,
which will still be able to wield control over 3% of MTS, even though it
owns only 51% of VAST.

Money market

The Russian FX market keeps on tracking euro-dollar movements, practically
ignoring local developments. On Tuesday the euro slumped below USD 1.20 on
the back of strong U.S. durable orders before surging to USD 1.207, likely
buoyed by rising business confidence in France. We would still bet on a
move toward a stronger dollar, which would likely spur the greenback
closer to RUR 29.

Bond market

The rouble bond saw little movement on Wednesday on the back of safe
liquidity volumes. The mid-term trend still retains some risk of downside,
enhanced by global yield expansion. That said, for investors who opt to
keep their money in the rouble bond market, the more attractive
instruments are likely to be on the second- and third-tier.
Russian eurobonds continue to follow U.S. treasuries, retaining a record
tight spread. The EMBI+ Russia index hit 145 bps on Wednesday, down 3 bps
on the day. Stronger-than-expected U.S. durable goods data on Wednesday
prompted a slight downturn in 10-year U.S. Treasuries, their yield
expanding by 2 bps to a three-month high of 4.26%. The Russia
,30
appreciated on Wednesday, losing 2 bps of its yield, compensating for
Tuesday
,s fall. We retain our outlook of further yield expansion, backed
by continuing interest rate hikes from the U.S. Federal Reserve.

Equity market

The Russian equity market is stubbornly resisting a correction, with the
RTS gaining 0.3% on Wednesday on melting turnover. Many papers again
closed in the black, LUKoil leading the pack domestically with a 1.1%
rise. ADRs demonstrated an even brighter performance with Golden Telecom
jumping 2.8%, Evraz gaining 2.3%, and Novatek continuing its own solid
rise, up 1.5% on the day. Sibneft, which announced a cut-off date for its
generous dividends, was the big mover of the day (see story above)
)
)the
stock closed 3.1% up on the MICEX. Sibneft ADRs continue trading with
dividends pending NASDAQ
,s setting of a record date for ADR holders.
Standard rules imply going ex-dividend two trading days before the record
date set by NASDAQ.
With the summer lull finally kicking in, the market is likely to drift
sideways on Thursday. Minor upside in the morning is possible given the
results of the overnight session.