Yesterday, global equity markets retraced part of the losses incurred over the previous days as risk sentiment was healed by reassuring statements from the ECB that the SPM program exists and could be used to purchase peripheral debt. The 5Y yields of EU countries fell, giving a 1-6bp step back (with Portugal remaining very volatile, posting a 32pb decline on the day) on the back of the reassuring ECB statements. Overnight, Italy successfully placed the targeted EUR 11bn (albeit the cost almost doubled from the previous placement). Otherwise, the Fed's Beige book failed to provide any fresh clues about the outlook for the US economy (especially important in light of the disappointing non-farm payrolls), sticking to the' moderate-to-moderate' motto used since late-February.
On the domestic front, the key event was Prime Minister Vladimir Putin’s speech to the State Duma in which he reiterated the key development priorities: building the ‘New Economy’ was one of the central themes. The stable growthdespite fierce competition with other countries, external shocks and the rapid development of new technologies worldwide was highlighted as the ultimate growth priority, which cannot be achieved without increasing the efficiency of Russian companies (including those that are state-owned). This line of thinking goes hand in hand with a bunch of initiatives that have recently been gaining traction, including improvements in corporate governance and cost efficiency, and confirms the positive view towards the emerging momentum of value crystallisation at state-owned companies.
As for the details of the price action on Monday, the most tangible positive moves in the liquid space were posted by Energies and Golds. Among individual stocks, almost all key Energy names outperformed with the most significant gains achieved by Surgutneftegaz (+2.6%, 0.8x 1M average daily trading volume), NOVATEK (+2.6%, 1.1x) and Gazprom Neft (+2.2%, 0.3x). Tatneft (- 1.4%, 1.2x) and Transneft pref. (-0.4x) were the only negative performers among Energy blue chips. In Golds, we note the advances of Petropavlovsk (+3.2%, 0.7x) which occurred after the substantial decline on Tuesday (-4.8%). Elsewhere in the liquid space we point out the gains of NLMK (+1.5%, 0.6x), Mechel (+4.2%, 0.2x) and Yandex (3.0%, 0.2x). Uralkali (+1.5%, 0.8x) also finished the day up, reacting to the news about its strong 2011 IFRS results. On the bleaker side, X5 Retail Group (2.4%, 1.7x) dampened on elevated volumes on the news of its weak 1Q12 trading update, published yesterday. In the less liquid space, there were substantial movements in Highland Gold (+7.2%, 0.3x), CEDC (+6.0%, 0.7x), MOESK (-4.3%, 0.3x) and EDC (-3.1%, 0.3x).
On the corporate calendar front today, Sberbank and NCSP have their recordsdates, and Globaltrans is reporting FY11 IFRS.