Департамент торговых идей

According to the results of 1H2019, there is an increase in revenue by 74% yoy to 178bn tenge. The main growth effect was provided by the provision of mobile communication services in the amount of 72bn tenge.

Growth of the economy of Kazakhstan remained above 4% in the first half of 2019, demonstrating resistance to lower oil prices and the suspension of oil production in Kashagan due to high investment activity in the extractive sector and increasing government spending to compensate for weakening external demand. Inflation has slowed to 5.4% from 5.9% a year earlier, and the unemployment rate fell slightly to 4.8% from 4.9%. However, we note growing inflationary pressures and continued dependence on oil revenues. Based on the current dynamics of the main macroeconomic factors, we expect GDP growth of 4% in the base case for 2019, inflation at 5.4%, and the national currency - 385 tenge per dollar at the end of this year.

Following yesterday's trading results, the price of uranium slightly rose by 0.2% to $25.2/lbs. Support for the metal was provided by the statement of Kazatomprom on the extension of the reduction of uranium production.

According to 1H2019 results, the company's revenue showed an increase of 43% yoy to T119bn.

With a 3.5% yoy increase in cost of sales, gross margin strengthened from 38% to 41% in the reporting period.

Profit for the period amounted to T22.6bn, which is lower by 14% yoy.

Despite an increase in production, Kaz Minerals lost 4% in revenue following the correction of copper prices in 1H2019.

In January-July 2019, the STEI reached 4.4% yoy, which is lower than in 2017 (5.5% yoy) and in 2018 (4.9% yoy) for the same period. According to our estimates, commodity sector’s contribution to the STEI, including transportation and sales of commodity sector products was 3.26pp, which is about 74% growth.

Yesterday, Lukoil published preliminary production results for 1H2019. During the reporting period, the average daily hydrocarbon production increased by 2.8% yoy and amounted to 2.4mn bopd. Progress on projects in Uzbekistan continues to have a positive impact on production dynamics.

We confirm our recommendation to Buy Centerra Gold’s shares with 12M TP 13,73 CAD/share: gold prices continue to show positive dynamics amid increased risks due to trade conflicts, a slowdown in global economic growth and uncertainty with Brexit. In addition, Centerra Gold improved its projected gold production levels for 2019 and achieved a reduction in all-in sustaining cash costs, which will positively affect the financial results of the Company.

For 1H2019 Gazprom Neft's revenue increased by 7% y/y to RUB1215 bn. Revenue from the sale of petroleum products increased by 5% and amounted to 788 bn rubles or 65% of all revenue. Revenue from the sale of oil increased by 12%, providing 377 bn rubles or 31% of total revenue. A strong increase in sales was mainly in the export sector, both for petroleum products (+ 15% y/y) and for oil (+ 13% y/y).