Russian Trading System Stock Exchange (RTS) 09/04/2012 13/04/2012 After several weeks of downturn, Week 15 can please

e with a positive market performance, very slightly positive although. Main market index RTS Index (RTSI) shows +0.26% (the week opened at 1612.26 points and closed at 1616.23). The highest value of the index was on Friday, April 13 (1628.44 points, +1.02%), the lowest during the 2nd half of Tuesday, April 10 (1586.64 points, 1.58%). RTS Oil & Gas Index (RTSOG) did a bit better than the main index, showing +0.95% (208.8 and 210.02 points at the beginning and at the end of the week respectively). Talking about particular industries, this weeks best performance was shown by RTS Telecom Index (RTSTL), +1.51%, and the worst by RTS Electric Utilities Index (RTSEU), which ended up at -0.94%.

Figure 1. RTSI and RTSOG indices, April 9, 2012 April 13, 2012. Source: tikr.ru

In spite of the fact that RTS Metals and Mining Index (RTSMM) was not among the best performers (only +0.12% this week), the biggest winner of the period is Uralkali (URKAS), which gained 3.00%. A bit behind, but still in a very good position there are Lukoil (LKOHS) and RusHydro (HYDRS) with +2.54% and +2.04% respectively (which is interesting, because last week URKAS and HYDRS were among the biggest losers). Concerning the weeks outsiders, Tatneft (TATNS) has no competitors with its -4.56%, and is followed by preferred stocks of Sberbank (SBERPS) which lost 2.27% and GMK Norilsk Nickel (GMKNS) which stocks declined by 2.58%.

This week Tatneft (TATNS) suffered its biggest loss of the year. The oil producers share prices dropped by as much as 7.41% from its peak of EUR 5.21 on Monday to EUR 4.87 on Thursday. Due to this, TATNS is now behind the RTSI by approximately 5% which is a big change, because the stock had been above the RTSI since March 23. However, TATNS looks slightly better when comparing the opening and closing prices of the week. Here we can see that the share price declined by 4.67% from its opening price of EUR 4.92 to EUR 4.69 on Friday. Nevertheless, this is still the biggest drop out of all of the stocks that are tradable in the Invest Game from the RTS.

Figure 2. TATNS share price trend, April 9, 2012 April 13, 2012. Source: tikr.ru

Looking ahead, we can see that there should be at least a slight increase in the share price, since the stochastic oscillator shows that the stock is currently oversold. The general trend will most likely remain negative as the price of oil continues to be actively pushed down by a drop in seasonal demand and EU countries releasing their strategic oil reserves. This week Sberbank, pref (SBERPS) shows a negative trend. The week was opened with EUR 2.00 per share. After some modest movements upwards right before Friday, the chart experienced a sharp drop which at the end of the week determined EUR 1.95 closing price. Overall trend fell by 2.27%. News about the fact that SBERPS has declared its dividends (after the stock peaked) caused surprising decrease by EUR 0.05 in the stock price. Most likely time will show positive movements for Sberbank it the future, because large investments are planned.

Figure 3. SBERPS share price trend, April 9, 2012 April 13, 2012. Source: tikr.ru

Uralkali (URKAS) is one of the worlds largest potash producers. The company was the biggest winner in RTS; its share value increased by 3%. In the middle of the week 15, URKAS published its financial statements for the full year ended 31 December 2011. Statements show that the company was operating with full capacity in 2011 and it was able to record a 41% year-on-year increase in revenues while not eroding EBITDA margin. Moreover, potash prices were high due to considerable demand around the world during the last year. That all helped the company to ensure 75% increase in EBITDA compared to the last years performance. All in all, Russian stock market responded well to these figures.

Figure 4. URKAS share price trend, April 9, 2012 April 13, 2012. Source: tikr.ru

Since the end of the February 2011 URKAS share price has been decreasing. Also the price has not been able to break through the resistance line which has pushed the price back for 5 times in the last

30 days. The strong numbers in the newest financial statements could be an impact to turn the downwards sloping trend around. It looks like the market is not only starting the recovery from quite a long-time decline, but also that there is a potential to perform even better. Companies announce their financial indicators, pay out dividends and attempt to apply innovative technologies, which should stimulate the activity of existing market players and attract some new ones. Toms Andersons, Uldis Boldans, Einars Garoza, Darya Skakouskaya.