Fortnightly Investment Insight

Market view
) the fortnight ahead

Investors in Russian equities are being torn between the desire to take
profits after an almost four-month bull run and the hunger to buy on the
dips. Having completed its quest to reach 900 points, the benchmark RTS
index set off towards 1,000 this week. Ample inflow of domestic liquidity
ensures stable bids with any attempt to take profits meeting constant
demand from buyers. While across-the-board profit-taking seems premature,
the market is clearly overbought at these levels and a period of
correction may soon step in.

Russian second-tier oils: A variety

Over the last month second-tier Russian oil companies have undergone a
certain revaluation, triggered by a plethora of events, including a
successful Urals Energy IPO, PetroKazakhstan takeover by CNPC, and AFK
Sistema buying into Bashkir oil sector.

Baltika vs Lebedyanski: juice looks sweeter

The consumer sector has earned a reputation as one of the most challenging
in the Russian equity market. Soaring consumer spending, coupled with the
scarce supply of assets with exposure to the sector, has already sparked a
rally in existing consumer stocks. Despite the recent growth spurt,
however, we still see room for turning a profit, and here we focus on two
beverage market mainstays: Lebedyanski and Baltika.