Департамент торговых идей

Inflation in September rose slightly by 0.3% after 0.2% throughout the summer. In annual terms, inflation fell by 0.2pp to 5.3%. The main drivers of accelerating price increases - food products showed a slowdown, although the rise in prices for bread, milk and meat remains quite high. Since the beginning of the year, the price increase amounted to a moderate 3.3%, which corresponds to the same indicator last year. 

Yesterday Samruk-Kazyna announced its intention to sell about 6.5mn GDRs of Kazatomprom. A detailed release on the book-building procedure of KAP has been posted on its website. The final number of offered shares and the offering price will be known by the end of the bookbuilding process.

We recommend to Hold Gazprom Neft's shares with 12M TP 446rub. per share. After reaching our target level of 416 rubles, upside of the shares is limited to 7% and is no longer sufficient for the Buy recommendation. We believe that long-term growth triggers and market expectations of strong results for 2019 already accounted for in the current price. At the same time, the Gazprom Neft shares remain interesting due to the expected semi-annual dividend payments at the beginning of the 4th quarter of this year.

In January-August 2019, the STEI reached 4.8% yoy, which is lower than in 2017 (5.8% yoy) and higher than that in 2018 (4.5% yoy) for the same period.

According to FTSE index provider (Russell), Polymetal shares will return to the FTSE 100 index in the middle of September. The index includes the largest companies traded on the London Stock Exchange (LSE).

Inflation in August remained at the level of the previous month at 0.2% and stayed unchanged throughout the summer. In annual terms, inflation increased by 0.1pp to 5.5%. August inflation data indicate a continued trend in accelerating prices, observed for almost two quarters. In addition to food products such as bread and meat, that are almost three times faster than the general price increase, stationery, books, clothes, and rental housing became additional inflation drivers before the start of the school year. Also, due to harvesting, diesel continues to rise in price. 

Lukoil results for 6M2019 demonstrate revenue growth of 7.9% yoy to 3 977bn rubles. EBITDA increased by 22.5% yoy to 630.2bn rubles. The growth was driven by higher sales volumes of crude oil and natural gas due to higher production volumes. The increase was also supported by the ruble devaluation resulting in higher average international prices for hydrocarbons in ruble terms, which partially offset the increase in the price of purchased crude oil by 5.7% yoy to 2.2bn rubles.

Economic growth accelerated to 4.4% yoy in the second quarter of this year despite lower oil prices and reduced oil production, while tax revenues showed double-digit growth rates, which helped to maintain the relative stability of the state budget. According to our forecast, the expansion of the non-oil deficit of the state budget by 1pp to 8.4% of GDP this year indicates that large budget expenditures have not yet been transformed into stable structural changes in the economy, while the dependence of the state budget on the oil industry remains at a high level.

Kazatomprom's financial results show revenue growth of 22% in 1H2019, mainly reflecting the rise of uranium spot prices.

According to 1H2019 results, Polymetal increased its revenue by 20% to $946mn due to the relatively high sales of gold (+36% yoy to 604koz), which offset the decline in silver sales (-15% yoy to 10.3moz). At the same time, the average selling prices of gold remained almost unchanged, while silver price declined by 7% yoy.