Russian Trading System Stock Exchange (RTS) 02/04/2012 06/04/2012 Similarly to the previous weeks performance of the market,

, the beginning of Week 14 looked more optimistic than the end: although during the first two days the market gained 28.1 points, the overall performance resulted in 1.49% decline (the week opened at 1637.73 and closed at 1614.06 points according to RTS Index (RTSI)). RTS Oil & Gas Index (RTSOG) did even worse: 212.50 at the beginning and 208.45 at the end of the Fridays session (dropped by 1.91%). Concerning the market in general, the best result was shown by RTS Industrial Index (RTSIN); it was the only one of all the RTSs indices which showed positive trend (+2.34%).

Figure 1. RTSI and RTSIN indices, April 2, 2012 April 6, 2012. Source: tikr.ru

Going particularly to the stocks behaviour, the best performance was shown by Sberbanks common stocks (SBERS) and JSC Severstal (CHMFS), which gained 0.29% and 0.04% respectively. Uralkaliy (URKAS), RusHydro (HYDRS) and preferred stocks of Surgutneftegaz (SNGSPS) lost 3.91%, 5.23% and 6.28%. Despite the overall decline of 2.25% in RTS Financials Index (RTSFN), Sberbank (SBERS), turned out to be best performer among stocks. SBERS opened week with EUR 2.47, then showed positive movements in the middle and at the end of the week, but closed with EUR 2.48 per share. This indicates small but positive 0.25% increase in the stock price. The stock might be experiencing positive path despite of market, because of agreement with Canadian company: Export Development Canada (EDC). EDC plans to finance SBERS with EUR 210 million to increase Russian demand for Canadian goods. More to that, two weeks ago SBERS main shareholder State announced to sell 7.6% (EUR 4.5 billion) of SBERS stocks to private sector.

Figure 2. SBERS share price trend, April 2, 2012 April 6, 2012. Source: tikr.ru

It has been a tough week for Surgutneftegaz (SNGSS), with the stock price falling by 3.43% to EUR 0.73 when the market closed on Friday (the weeks opening price was EUR 0.75). SNGSS was one of the most actively traded stocks in the RTS last week, as there was much speculation on the falling oil futures and the oil output hit record levels. The start of the week was a bit more positive for SNGSS where it peaked at EUR 0.78, gaining 2.64% from the opening price of EUR 0.76. Surprisingly enough, the stock price went up even though the company suffered a tragic loss of one of their board members in a plane crash on Monday.

Figure 3. SNGSS share price trend, April 2, 2012 April 6, 2012. Source: tikr.ru

SNGSS has been on a downward trend since Thursday, March 15, losing approximately 16% from its peak of EUR 0.87. This matches what we had written about a few weeks ago. Currently the stock is oversold, so its price might increase slightly at the start of the week. However, the preferred stock of Surgutneftegaz (SNGSPS) has shown a much more severe negative trend, losing 6.28% from its opening price of EUR 0.55 to EUR 0.50. In fact, this was the biggest drop from all of the RTS stocks that are tradable in the Invest Game, making the outlook for Surgutneftegaz very hard to predict.

Figure 4. SNGSPS share price trend, April 2, 2012 April 6, 2012. Source: tikr.ru

Norilsk Nickel (GMKNS) the worlds biggest nickel and palladium producer experienced another tough week. The company lost 2.62% of its share value and is headed for its lowest in three months. One of the main reasons was that HSBC Holdings Plc cut Norilsk Nickels rating to neutral. Moreover, predictions about nickel market are not optimistic. China, the worlds leading nickel consumer, has been slowing down, and most of the predictions assume that globally there will be production surplus of nickel in 2012. That means supply has been expanding faster than demand. About 60% - 70% of pig iron produced in China is produced from Indonesian nickel ore. But GMKNS can benefit from that, because Indonesia has set nickel export ban which will take effect in May 2012. So GMKNS could bounce back from the decline which started in the middle of March when the stock price was EUR 152.60, but now has hit EUR 136.63 level.

Figure 5. GMKNS share price trend, April 2, 2012 April 6, 2012. Source: tikr.ru

RSI and Stochastic Oscillator indicators are close to level which indicates that the short term trend is weak. That means that GMKNS stocks are oversold and soon there will be at least a small rise in its value. Overall, it is clearly seen that the negative performance of the market continues. Partly it may be a reflection of both political and economic situation in the country: the state shows quite high activity in the market (by actively selling its shares of some of the companies), but the performance and development of companies does not look good and the forecasts are usually too optimistic (it can be proved by, for instance, the fact that new working places are created far slower than it was stated in the government plans). These factors do not add credibility and, therefore, do not increase attractiveness of the market for investors. Toms Andersons, Uldis Boldans, Einars Garoza, Darya Skakouskaya.