Russian Strategy & Economics
Transcript of Russian Strategy & Economics
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Source:Bloomberg,
31
Dec
2009 Source:
MSCI,
Bloomberg,
31
Dec
2009Source:
MSCI,
Bloomberg,
31
Dec
2009
MSCIRUperformancevsEM,GlobalOil(%):In2009
theoildependentRussianmarketoutperformedboth
theMSCIEMandAMEXOilindices.
Russianindicesperformance(%):In2009theRTSIndex
($)outperformedboththeRDX($)andtheMICEX(RUB).
MSCIIndices,1Mperformance:Overthelastmonth
MSCIRussia(up3%)hasunderperformedwithinthe
EMuniverse.
MSCIindices,Currentindexlevelvs5Yaverage:
Comparedtoits5Yaverage,theMSCIRUIndexis
currentlyatthelowestlevelofanyEM.
Russianmarketvolatility,90Days:Althoughsharply
downfromitsrecenthigh,theRussianmarket
remainsmorevolatilerelativetoEMpeers.
Source:MSCI,Bloomberg,31Dec2009 Source:MSCI,Bloomberg,31Dec2009 Source:MSCI,Bloomberg,31Dec2009
MSCIindices,2009performance:In2009MSCIRussia
gained100%andassuchwasthefourthbestperforming
emergingmarket.
STOCKMARKE
TPERFORMANC
E
3%3%
4%4%
5%6%
7%8%9%
20%
5%2%
1%0%
1%2%
10% 5% 0% 5% 10% 15% 20%
CzechRepPoland
HungaryChinaBrazil
MexicoRussia
India
MSCIEMArgentina
S.AfricaIndonesia
ThailandKorea
TaiwanTurkey
69%70%
74%74%75%
92%100%101%
121%121%
61%59%
53%53%
37%20%
0% 30% 60% 90% 120%
CzechRepPolandMexico
S.AfricaChina
ArgentinaKorea
ThailandHungary
MSCIEMTaiwanTurkeyRussia
IndiaIndonesia
Brazil
30%
0%
30%
60%
90%
120%
Jan09 Mar09 May09 Jul09 Oct09 Dec09
MSCIRussia MSCIEM AMEXOIL
30%
0%
30%
60%
90%
120%
Jan09 Mar09 May09 Jul09 Oct09 Dec09
RTS Micex RDX
7%4%2%
2%10%12%
16%19%
23%27%28%28%
45%46%
66%71%
20% 0% 20% 40% 60% 80%
RussiaPoland
HungaryArgentin
TaiwanCzechKoreaThailand
MexicoTurkey
S.AfricaEM
IndiaChina
IndonesiaBrazil
0
20
40
60
80
100
Jan07 Jul07 Dec07 Jun08 Dec08 Jun09 Dec09
RTS MSCIWorld MSCIEM
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MSCIRussiaEnergyIndexrelativetoMSCIEM
Energy:In2009RussianEnergynamesperformedin
linewithEMpeers.
Source:MSCI,
Bloomberg,
31
Dec
2009 Source:
MSCI,
Bloomberg,
31
Dec
2009 Source:
MSCI,
Bloomberg,
31
Dec
2009
MSCIRussiaMaterialsIndexrelativetoMSCIEM
Materials:RussianMaterialsstocksoutperformed
theirEMpeersby19%in2009.
MSCIRussiaFinancialsIndexrelativetoMSCIEM
Financials:MSCIRussiaFinancialsoutperformed
theirEMpeersby88%.
MSCIRussiaCon.StaplesIndexrelativetoMSCIEM
Con.Staples:Russia'sbestperformingsectorin2009
relativetoitsMSCIEMpeers.
MSCIRussiaTelecomsIndexrelativetoMSCIEM
Telecoms:RussianTelecomsnamesoutperformed
theirEMpeersby52%.
Source:MSCI,Bloomberg,31Dec2009Source:MSIC,Bloomberg,31Dec2009Source:MSCI,Bloomberg,31Dec2009
MSCIRussiaHealthCareIndexrelativetoMSCI
EMHealthCare:MSCIRussiaHealthCare
outperformeditsEMpeersby38%.
STOCKMARKETPERFORMANC
E
0.8
0.9
1.0
1.1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Jan Feb Mar Apr May Jun Jul Aug Sep Nov Dec
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Jan Feb Mar Apr May Jun Jul Aug Sep Nov Dec
0.7
0.8
0.9
1
1.1
1.21.3
1.4
1.5
1.6
1.7
Jan Feb Mar Apr May Jun Jul Aug Sep Nov Dec
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jan Feb Mar Apr May Jun Jul Aug Sep Nov Dec
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MSCIRussia:1Mperformancebysector(%) MSCIRussia:3Mperformancebysector(%) MSCIRussia:2009performancebysector(%)
Source:MSCI,Bloomberg,31Dec2009Source:MSCI,Bloomberg,31Dec2009 Source:MSCI,Bloomberg,31Dec2009
Source:MSCI,
Bloomberg,
31
Dec
2009 Source:
MSCI,
Bloomberg,
31
Dec
2009Source:
MSCI,
Bloomberg,
31
Dec
2009
MSCIRussia:Sectorcorrelationswithoilprice(rolling
correlationofweeklychanges)
MSCIRussia:CorrelationwithMSCIEMandMSCI
Worldindices(rollingcorrelationofweeklychanges)
MSCIRussia:Correlationwithoilprice(rolling
correlationofmonthlychanges)
79%
85%
93%
100%
115%
141%
232%
262%
0% 50% 100% 150% 200% 250% 300%
Energy
Telecoms
HealthCare
MSCIRussia
Utilities
Materials
Financials
ConsStaples
STOCKMARKETPERFORMANC
E
6%
1%
0%
3%
3%
5%
16%
20%
10% 0% 10% 20%
Utilities
Materials
Telecoms
Energy
MSCIRussia
HealthCare
Financials
ConsStaples
3%
5%
6%
10%
12%
14%
33%
37%
0% 10% 20% 30% 40%
Utilities
Telecoms
Energy
MSCIRussia
Materials
Healthcare
ConsStaples
Financials
0.0
0.2
0.4
0.6
0.8
1.0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
w.MSCIEM w.MSCIWorld
0.4
0.2
0.0
0.2
0.4
0.6
0.8
1.0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Jun06 Dec06 Jul07 Jan08 Aug08 Feb09 Sep09
Energy FinancialsMaterials TelecomCons.stpls
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RDXperformance,1M(%)
Source:
Bloomberg,
31
Dec
2009
RTSperformance,1M(%)
Source:Bloomberg,31Dec2009 Source:Bloomberg,31Dec2009
MICEXperformance,1M(%)
STOCKMARKETPERFORMANC
E
18%
10%5% 3% 3%
0% 0% 0%1% 1%
10% 12% 13%14% 16%
20% 21% 21% 23%
39%
30%
20%
10%
0%
10%
20%
30%
40%
50%
RTKM
RBCI
URKA
PMTL
OGKE
TATN3
LKOH
HYDR
PLZL
MTSI
SNGSP
VTBR
RASP
CHMF
MSNG
SBERP
AFLT
URSI
SBERP
VTEL
TOPBOTTOM
14%11%7% 6% 5% 4%
3% 2% 2% 1%
11%
18%25% 27%
50%
76%
41%
26%18%15%
30%
10%
10%
30%
50%
70%
FEES
URKA
RTKM
OPIN
SVAV
SNGS
MAGN
PHST
PMTL
NLMK
NMTP
TRNFP
SBER
AFLT
ESMO
URSI
BANE
NNSI
ENCO
SPTL
TOPBOTTOM
12%10%
5%3%
0% 0%
0%2% 2% 4%
6%8%
11%14% 15%
15%
10%
5%
0%
5%
10%
15%
20%
URKA
ATAD
NLMK
PLZL
NVTK
LKOD
SGGD
HYDR
ROSN
MNOD
VTBR
SSA
EVR
OGZD
SVST
TOPBOTTOM
5
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RDXperformance,2009(%)
Source:
Bloomberg,
31
Dec
2009
RTSperformance,2009(%)MICEXperformance,2009(%)
Source:Bloomberg,31Dec2009 Source:Bloomberg,31Dec2009
STOCKMARKETPERFORMANCE
239%
663%
450%
389%338%
300%265%
251%
246%
205%
109%108%
108%99%
93%89%
76%70%
63%
43%80%
100%
280%
460%
640%
820%
RTKM
SNGS
GAZP
LKOH
HYDR
AFLT
MTSI
OGKE
VTBR
PLZL
NLMK
TRNFP
MSNG
NOTK
SBER03
OGKC
MAGN
RASP
VTEL
SBERP
TOPBOTTOM
2%
16%55% 61% 65% 67% 73% 76%
80%
265% 280%
347%
35%
444%
550%
369%278%
340% 362%371%
50%
100%
250%
400%
550%
OPIN
RTKM
SCON
IRGZ
SNGS
NMTP
GAZP
AFLT
LKOH
HYDR
TRNFP
OGKC
SBER
ENCO
MGNT
ESMO
RASP
AFKS
NNSI
BANE
TOPBOTTOM
80% 82% 82%123% 136% 136% 140%
141%
188% 209%
236% 250%269%
311%
0%
100%
200%
300%
400%
SGGD
OGZD
LKOD
VTBR
ROSN
MNOD
PLZL
URKA
ATAD
NLMK
EVR
NVTK
SVST
SSA
TOPBOTTOM
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MICEXliquidity
($mn):
Liquidity
on
the
MICEX
has
recovered
from
its
recent
low
at
end
2008/beginningof2009,withanaveragedailytradedvolumeof$1.8bnoverthepast10
months.
RTSliquidity
($mn):
Liquidity
on
the
RTS
in
2H09
only
slightly
improved
on
1H09
and
remainswellbelowitsprecrisislevel.(Note:dataisforRTSClassicaIndex)
Source:
Bloomberg,
Aton
estimates,
31
Dec
2009
RDXliquidity($mn):WhiletheliquidityinGDRs,representedherebytheRDXIndex,
hasrecoveredsomewhatfromitsrecentlow,liquidityremainswellshortofitsprecrisis
level.
Source:Bloomberg,Atonestimates,31Dec2009 Source:Bloomberg,Atonestimates,31Dec2009
0
1,000
2,000
3,000
4,000
5,000
6,000
Jan08 Mar08 Jun08 Sep08 Dec08 Mar09 Jun09 Sep09 Dec09
Ave.value=$2,197
Ave.value=$856
Ave.value=$1,828
0
1,000
2,000
3,000
4,000
5,000
Jan08 Apr08 Jun08 Sep08 Dec08 Mar09 Jun09 Sep09 Dec09
Ave.value= $586mn
Ave.value= $1,664
Ave.value= $854
0
20
40
60
80
100
120
Jan08 Apr08 Jun08 Sep08 Dec08 Mar09 Jun09 Sep09 Dec09
Ave.value=$44
Ave.value=$11
Ave.value=$13
MARKET
LIQUIDITY
7
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P/CF2010E:Inaddition,Russiahasoneofthelowest2010Eprice/cashflowratios
(5.8x)intheemergingmarketspace.
Source:
MSCI,
Bloomberg,
13
Jan
2010Source:
MSCI,
Bloomberg,
13
Jan
2010
12MFWD
P/E:
With
a12M
FWD
P/E
of
9.1x,
Russia
hasthelowestP/EratiointheEMuniverse.P/BV
2010E:
The
same
is
true
for
2010E
P/BV
ratios,
withMSCIRussia'saggregateratioat1.1x.
Dividendyield2010E:Withoneofthesmallestexpecteddividendyields(2.4%)Russia
remainsalimiteddividendplay.
Source:MSCI,Bloomberg,13Jan2010 Source:MSCI,Bloomberg, 13Jan2010 Source:MSCI,Bloomberg,13Jan2010
EV/EBITDA2010E:Russiaalsolooksattractiveon
EV/EBITDAratios,
with
amultiple
of
5.1x,
again
the
lowestintheEMuniverse.
MARKETV
ALUATIONS
9.110.310.510.510.5
11.211.611.8
11.913.1
14.414.814.915.0
17.518.4
0 5 10 15 20
RussiaTurkey
KoreaEM
ArgentinaCzech
ThailandHungary
S.AfricaBrazilChina
PolandIndonesia
MexicoTaiwan
India
1.11.3
1.41.51.6
1.71.7
1.92.0
2.12.1
2.32.6
2.63.2
3.4
0.0 1.0 2.0 3.0
RussiaHungary
KoreaPoland
S.AfricaTurkey
Thailand
EMTaiwan
CzechBrazilChina
MexicoArgenti
IndiaIndonesi
4.15.35.45.5
5.85.95.9
8.1
8.38.5
9.310.1
10.310.5
3.3
0 3 6 9 12
HungaryPoland
KoreaTurkey
S.AfricaRussia
ArgentinaThailand
Brazil
EMMexico
ChinaIndia
CzechTaiwan
5.15.2
6.46.56.76.7
7.37.67.68.18.5
9.310.0
26.5
0 5 10 15 20 25 30
RussiaCzech
Thailand
ChinaBrazil
Indonesi
MexicoTurkey
EMS.Africa
PolandHungary
IndiaArgenti
1.21.7
2.42.4
2.93.0
3.13.4
3.5
3.63.9
3.94.1
4.24.2
6.4
0 1 2 3 4 5 6 7
IndiaKoreaRussia
MexicoEM
ChinaBrazil
IndonesiHungary
TurkeyS.AfricaTaiwan
ThailandArgentiPoland
Czech
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12MFWDP/E
(x)
P/BV2010E
(x)
P/BV2011E(x) EV/EBITDA
2010E(x)
EV/EBITDA
2011E(x)
P/CF2010E(x) EPSgrowth
2009E*
EPSgrowth
2010E*
Currentindex
levelvs5Yave.
Russia 9.1 1.1 1.0 5.1 4.2 5.8 45% 36% 7%
Argentina 10.5 2.6 2.4 26.5 23.7 5.9 66% 14% 2%
Czech 11.2 2.1 2.0 5.2 5.0 10.3 4% 2% 12%
Turkey 10.3 1.7 1.5 7.6 6.3 5.4 3% 10% 27%
S.Africa 11.9 1.6 1.2 8.1 6.6 5.5 21% 14% 28%
Brazil 13.1 2.1 1.9 6.7 5.8 8.1 6% 22% 71%
Poland 14.8 1.5 1.4 8.5 7.3 4.1 34% 14% 4%
Mexico 15.0 2.6 2.3 7.3 6.4 8.5 8% 17% 23%
EM 10.5 1.9 1.7 7.6 6.6 8.310% 27% 28%
Korea 10.5 1.4 1.3 N/A N/A 5.3 25% 33% 16%
China 14.4 2.3 2.0 6.5 5.6 9.3 1% 22% 46%
India 18.4 3.2 2.8 10.0 8.0 10.1 4% 2% 45%
Taiwan 17.5 2.0 1.9 N/A N/A 10.5 25% 71% 10%
Thailand 11.6 1.7 1.5 6.4 5.5 N/A 9% 13% 19%
Hungary 11.8 1.3 1.2 9.3 6.9 3.3 39% 15% 2%
Indonesia 14.9 3.4 2.9 6.7 5.8 1.7 2% 13% 66%
Lowestratios
Midrange
Highestratios
Source:MSCI,Bloomberg,13Jan2010,exceptCurrentindexlevelvs5Yave.whichis31Dec2009
Valuationandearningsmatrixforselectedemergingmarkets
*
Note
that
for
EPS
growth,
dark
red
shading
refers
to
the
highest
number
and
dark
grey
the
lowest
MARKETV
ALUATIONS
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P/BV2009vs2010E:Themarketcurrentlyexpectsa
marginalexpanionofbookvaluein2010.
Source:MSCI,Bloomberg, 13Jan2010
Financialsstocks2010EP/BV:RussianFinancials
currentlylookexpensiveon2010EP/BVmultiples.
P/BV:Discount/premiumvsEMandWorld
12MFWDP/E;currentvssixmonthsago:Overthe
pastsix
months
Russia's
P/E
has
re
rated
across
the
board,withthemarketagreggateP/Erising71%.
12MFWDP/E:RelativetoMSCIEMandWorld
indices,Russia
is
looking
increasingly
attractive
on
12MFWDP/Eratios.
12MFWDP/Ediscount/premiumvsEMand
World:Russia
trades
at
a14%
discount
to
EM
(Energy28%,Materials6%,Telecoms14%).
Source:MSCI,Bloomberg,13Jan2010Source:MSCI,Bloomberg,13Jan2010
Source:
MSCI,
Bloomberg,
13
Jan
2010 Source:
MSCI,
Bloomberg,
13
Jan
2010 Source:
MSCI,
Bloomberg,
13
Jan
2010
MARKETV
ALUATIONS
0
5
10
15
20
MARKET
Aggr.
ENERGY
MATERIALS
CONS
STAPLES
TELECOMS
HEALTH
CARE
12MFWDP/E 12mFWDP/E6MAGO
9
7
10
11
10
15
18
15
13
18
15
12
14
14
23
14
1212
0 5 10 15 20 25
MARKETAggr.
ENERGY
MATERIALS
CONSSTAPLES
TELECOMS
HEALTHCARE
Russia EM World
25%
1%
14%
43%
66%
7%
28%
62%36%
41%43%
54%
85% 40% 5% 50%
TELECOMS
MATERIALS
FINANCIALS
ENERGY
MARKETAggr.
UTILITIES
RussiavsEM RussiavsWorld
14%
28%
14%
45%
21%
55%
14%
15%0%
27%
6%
38%
70% 40% 10% 20% 50%
MARKETAggr.
ENERGY
MATERIALS
CONSSTAPLES
TELECOMS
HEALTHCARE
RussiavsEM RussiavsWorld
2.1
1.9
1.2
0.0 0.5 1.0 1.5 2.0 2.5
Russia
EM
World
0
1
2
3
TELECOMS
MATERIALS
FINANCIALS
MARKET
Aggr.
ENERGY
UTILITIES
2010 2011
10
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MSCIRussia,EV/EBITDA2010Evs2011E
Source:MSCI,Bloomberg,13Jan2010Source:MSCI,Bloomberg,13Jan2010
MSCIRussiavsEMandWorldindices,EV/EBITDA2010E
MSCIRussiaP/CF,2010Evs2011E
Source:MSCI,Bloomberg,13Jan2010Source:MSCI,Bloomberg,13Jan2010
MSCIRussiavsEMandWorldindices,P/CF2010E
MARKETV
ALUATIONS
4.1 4.45.1
6.9
8.8
2.83.7
4.2
5.8
8.0
0
2
4
6
8
10
UTILITIES ENERGY MARKETAggr. MATERIALS TELECOMS
2010 2011
4.4
5.1
8.8
5.6
7.6
5.0
7.3
7.6
6.9
4.1
7.8
6.7
11.9
5.4
5.1
0 2 4 6 8 10 12
UTILITIES
ENERGY
MARKETAggr.
MATERIALS
TELECOMS
Russia EM World
5.1 5.9
4.3
9.38.9
4.55.0
3.94.4
8.1
0
2
4
6
8
10
12
ENERGY MARKETAggr. TELECOMS UTILITIES MATERIALS
2010 2011
8.9
9.3
4.3
5.9
5.1
10.0
7.3
5.4
8.4
7.2
5.6
4.3
5.6
6.7
10.0
0 2 4 6 8 10 12
MATERIALS
UTILITIES
TELECOMS
MARKETAggr.
ENERGY
Russia EM World
11
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Source:MSCI,Bloomberg,31Dec2009 Source:MSCI,Bloomberg,31Dec2009
Source:MSCI,Bloomberg,31Dec2009
Source:MSCI,Bloomberg,31Dec2009
MSCIRussia
Consumer
Staples
and
EM
Consumer
Staples12MFWDEPS(Jan2008=100)
MSCIRussia
Telecoms
and
EM
Telecoms
12M
FWD
EPS(Jan2008=100)
MSCIRussia
Financials
and
EM
Financials
12M
FWDEPS(Jan2008=100)
Source:MSCI,Bloomberg,31Dec2009
MSCIRussiaEnergyandEMEnergy12MFWDEPS
(Jan2008=100)
Source:MSCI,Bloomberg,31Dec2009
MSCIRussiaMaterialsandEMMaterials12M
FWDEPS
(Jan
2008=100)
MSCIRussiaandEM12MFWDEPS(Jan2008=100)
50
60
70
80
90100
110
120
130
140
150
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
50
70
90
110
130
150
170
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
50
70
90
110
130
150
170
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
COMPANY
EARNINGS
40
50
60
70
80
90
100
110
120
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
50
60
70
80
90
100
110
120
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
0
20
40
60
80
100
120
140
Jan08 May08 Oct08 Mar09 Aug09
Russia EM
12
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Source:MSCI,Bloomberg,13Jan2010 Source:MSCI,Bloomberg,13Jan2010
Earningsgrowth,
2009
(%):
The
consensus
(IBES)
earnings
outlook
for
FY09
is
for
acontractionof45% oneofthemostnegativeoutlooksintheEMspace.
Earningsgrowth,
2010E
(%):
In
asharp
contrast,
the
consensus
(IBES)
expects
areboundinearingswith34%aggregategrowth
COMPANY
EARNINGS
66%
39%34%
25%21%
10%9%
6%4%3%1%
2%4%
8%25%
45%
80% 60% 40% 20% 0% 20%
ArgentinaRussia
HungaryPolandTaiwanS.Africa
EMThailand
BrazilIndia
TurkeyChina
IndonesiaCzech
MexicoKorea
2%2%
10%13%13%13%
14%14%
15%17%
21%23%
26%32%
34%
5% 0% 5% 10% 15% 20% 25% 30% 35% 40%
CzechIndia
TurkeyPoland
IndonesiaThailand
ArgentinaS.Africa
HungaryMexico
ChinaBrazil
EMKoreaRussia
Taiwan 71%
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Oilprice(Brent$/barrel)
Aluminiumprice
and
inventories
Source:Bloomberg,31Dec2009Source:Bloomberg, 31Dec2009
Goldpriceandinventories Nickelpriceandinventories
Source:Bloomberg,31Dec2009Source:Bloomberg,31Dec2009 Source:Bloomberg,31Dec2009
Source:Bloomberg,31Dec2009
Steelprice
(CIS
Export
HR
Coil
$/tonne) Copper
price
and
inventories
COMMODITIES
0
20
40
60
80
100
120
140
160
'01 '02 '03 '04 '05 '06 '07 '08 '09200
400
600
800
1,000
1,200
1,400
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
Inventories,TroyOz(rsc) Price,$/oz(lsc)
200
10,200
20,200
30,200
40,200
50,200
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
20,000
40,000
60,000
80,000
100,000
120,000
Inventories,tonne(rsc) Price,$/tonne,(lsc)
0
200
400
600
800
1,000
1,200
'01 '02 '03 '04 '05 '06 '07 '08 '091,200
3,200
5,200
7,200
9,200
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
200,000
400,000
600,000
800,000
1,000,000
Inventories,tonne(rsc) Price,$/tonne(lsc)
1,200
1,700
2,200
2,700
3,200
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
Inventories,tonne(rsc) Price,$/tonne(lsc)
14
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Source:Bloomberg,31Dec2009
Source:Bloomberg,31Dec2009
BalticDry
Index
and
HSBC
Global
Steel
Index Selected
Reuters
commodity
indices
Source:Bloomberg, 31Dec2009
Source:Bloomberg,31Dec2009
Palladiumpriceandinventories SilverpriceandinventoriesPlatinumpriceandinventories
Source:Bloomberg,31Dec2009
COMMODITIES
300
800
1,300
1,800
2,300
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
500
1,000
1,500
2,000
2,500
3,000
Inventories,50troyoz(rsc) Price,$/oz(lcs)
0
300
600
900
1,200
'01 '02 '03 '04 '05 '06 '07 '08 '09
0
2,000
4,000
6,000
8,000
10,000
12,000
Inventories,100troyoz(rsc) Price,$/oz(lcs)
0
5
10
15
20
25
'01 '02 '03 '04 '05 '06 '07 '08 '09
80,000
90,000
100,000
110,000
120,000
130,000
140,000Inventories,$/'000troyoz(rsc)Price,$/oz(lcs)
1,800
200
2,200
4,200
6,200
8,200
10,200
12,200
'01 '02 '03 '04 '05 '06 '07 '08 '09100
100
300
500
700
900
1,100
1,300
1,500
BalticDryIndex(lsc)
GlobalSteelHSBCIndex(rsc)
150
300
450
600
750
900
'01 '02 '03 '04 '05 '06 '07 '08 '09
150
250
350
450
550
CRBSpotmetalsCRBSpotallcommodities(rsc)CRBRawIndustrials
15
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RealRUB/USDandRUB/EURexchangerates(Dec97=100)OfficialRUB/USDandRUB/EURexchangerates
Source:CBR
Source:CBR,Bloomberg,13Jan2010 Source:CBR,Bloomberg, 13Jan2010
Source:CBR,Atonestimates
1MchangeinmajorEMandfrontiermarketcurrencies(%) 12MchangeinmajorEMandfrontiermarketcurrencies(%)
CURRENCIES
3.7%3.3%
2.9%2.2%
1.8%1.8%1.7%
1.5%1.4%
1.1%0.6%0.6%
0.2%0.1%0.1%
0.0%0.7%
1.9%
5% 4% 3% 2% 1% 0% 1% 2% 3%
TurkeyKorea
IndonesiaRussia
PolandHungaryS.Africa
MalaysiaMexicoTaiwan
KazakhstanPhilippines
ThailandArgentina
BrasilChina
EstoniaCzech
appreciation depreciation
24.1%
17.5%10.6%
7.1%6.3%6.0%5.8%4.9%
3.7%3.5%3.4%3.3%3.0%
0.7%9.9%
0.0%
22.5%
22.4%
30% 20% 10% 0% 10% 20%
BrasilS.Africa
IndonesiaKorea
MexicoCzech
PolandTurkey
ThailandEstonia
PhilippinesMalaysiaHungary
TaiwanChina
RussiaArgentinaKazakhsta
appreciation depreciation
20
25
30
35
40
45
50
2003 2004 2005 2006 2007 2008 2009
RUB/USD RUB/EUR Rub/basket
70
90
110
130
150
2003 2004 2005 2006 2007 2008 2009
RealRUB/USD RealRUB/EUR
16
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PolicyrateinBRIC(%):TheCBRiscurrentlythe
onlycentral
bank
in
the
BRIC
to
remain
in
easing
mode.
5YCDS
spread
change
since
2008
crisis
peak
level
(bpts)
Source:Bloomberg, 13Jan2010
Russia'sCDS
spread
(bpts)
Source:Bloomberg,13Jan2010Source:Bloomberg,13Jan2010
Current5Y
CDS
spreads
by
country
(bpts)
Monetarypolicyrates;levelsandchangefromprecrisis
peak(%):
Together
with
Brazil,
Russia
currently
has
the
highestinterestrateintheEMspace.
KeyratedifferencewithUSFedFundsRates(%):
Russiaand
Brazil
also
see
the
biggest
differentiantial
vstheFedFundsrate.
Source:CBR,Bloomberg Source:CBR,Bloomberg Source:CBR,Bloomberg
INTERESTRATES/RISKINDICATORS
164.5
100
300
500
700
900
1100
1300
Aug08 Oct08 Jan09 Apr09 Jul09 Oct09
164.5
0 50 100 150 200
MalaysiaThailand
PhilippinesSouthAfrica
CzechRepublicIndonesia
PolandCroatiaArgentina
EstoniaMexico
RussiaTurkey
KoreaKazakhstan
BrasilBulgaria
ChinaHungary
0.61.82.02.0
3.54.04.5
4.86.36.5
7.07.0
8.88.8
5.22.5
3.31.5
2.52.0
3.8
4.3
5.310.3
4.05.05.0
4.3
15 10 5 0 5 10
BulgariaChinaKorea
MalaysiaPoland
PhilippinesMexico
IndiaHungary
TurkeyKazakhstan
S.AfricaBrasil
Russia
Current
rates
Change
sincepre
crisispeak0.3
1.61.81.8
3.33.8
4.34.5
6.06.3
6.86.8
8.58.5
0 2 4 6 8 10
BulgariaChinaKorea
MalaysiaPoland
PhilippinesMexico
IndiaKazakhstan
S.AfricaHungary
TurkeyBrasil
Russia
948.9
1500 1200 900 600 300 0
ChinaCzech
PolandBrasil
HungaryThailandMalaysia
MexicoCroatiaBulgaria
KoreaSouth
EstoniaTurkey
PhilippinesRussia
IndonesiaKazakhsta
0
2
4
6
810
12
14
16
18
20
2005 2006 2007 2008 2009
Russia
Brazil
Indi
China
17
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QuarterlyGDPrealgrowthrate(%YoY): In3Q09
RussianGDP
shrank
by
8.9%,
an
improvement
on
a
10.9%contractionin2Q09.Nominal
GDP
(RUBbn):
Russia's
nominal
GDP
equalled
RUB10.5trnin3Q09.
BRICGDPgrowth(%YoY):WithintheBRIC
quartetRussia
saw
the
largest
GDP
decline
in
9M09.
GDPrealgrowthratein9M09(%YoY):Witha9.9%contractioninGDPin9M09Russia
isoneoftheworstaffectedeconomiesfromtherecession.
2010GDPgrowthestimate(%):WesuggestthatRussianGDPmayoutperformin2010
(+5.8%)vsitspeers,althoughmainlyduetoabaseeffect.
Source:Rosstat,Bloomberg
Source:Rosstat,BloombergSource:Rosstat Source:Rosstat
Source:IMF,*Atonestimates
THEECONOMY
15.69.9
8.67.1
1.71.31.20.9
0.30.5
0.70.70.91.2
2.04.2
6.7 7.6
20 15 10 5 0 5 10
EstoniaRussia
TurkeyHungary
KazakhstanMexico
ThailandSouth
ArgentinaBrazil
TaiwanPhilippines
MalaysiaPoland
KoreaIndonesia
IndiaChina
2.60.9
0.9721.5
1.7
2.22.5
3.23.3
3.53.63.73.73.7
5.86.4
9
2.0
5 3 1 1 3 5 7 9
EstoniaHungary
PhilippinesArgentina
SouthAfricaKazakhstan
PolandMalaysia
IndonesiaMexico
BrazilKorea
TaiwanThailand
TurkeyRussia*
IndiaChina
15%
10%
5%
0%
5%
10%
15%
1Q00 4Q01 3Q03 2Q05 1Q07 4Q08
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
1Q05 1Q06 1Q07 1Q08 1Q09
13
8
3
2
7
12
'01 '02 '03 '04 '05 '06 '07 '08 '09
Brazil China India Russia
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PMI:TheservicePMIremainscomfortablyabove
50(expansion)
while
the
manufacturing
PMI
postedareadingbelow50inDec09.
Unemploymentrate
(%):
After
arather
surprising
fall
inunemploymentduringmostof2009,ithasrisento
8.1%inNov.
Source:Rosstat Source:Rosstat
Structureofinductrialproduction(%YoY):Mining
andbasic
services
resumed
positive
growth
in
Nov
09.
IndustrialproductionandFixedinvestment(%YoY):
Avisible
recovery
in
IP
and
fixed
investment.
In
Nov
09
IPreturnedtopositiveYoYgrowth.
Source:Rosstat,Atonestimates
Source:VTB
Realdisposable
income,
Real
wage,
Retail
sales
(%
YoY):Recentdataarepointingtoarecoveryin
demandrelatedindicators.
Fixedinvestment
(%/GDP):
Fixed
investment
as
a
percentageofGDPhashoveredaround20%,one
ofthelowestintheEMspace.
Source:Rosstat Source:Rosstat
THEECONOMY
25%
15%
5%
5%
15%
25%
'00 '01 '03 '04 '06 '07 '09
IndustrialProduction FixedInvestment
15%
5%
5%
15%
25%
'00 '01 '03 '04 '06 '07 '09
RealDisposableIncomeRealWageRetailSales
25%
15%
5%
5%
15%
25%
'02 '03 '05 '06 '08 '09
Mining Manufacturing BasicServices
0
5
10
15
20
25
1Q95 1Q97 1Q99 1Q01 1Q03 1Q05 1Q07 1Q09
5%
6%
7%
8%
9%
10%
11%
12%
13%
'00 '01 '03 '04 '06 '07 '09
30
35
40
45
50
55
60
65
Jan07 Jul07 Jan08 Jul08 Jan09 Jul09
Services
Manufacturing
20
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Source:MinistryofFinance,Rosstat
FederalBudget(%/GDP):Despitearecoveryintheoilpriceahikeinspending,related
tofiscal
stimulus
efforts,
means
that
the
budget
balance
remains
in
the
red
(5.1%
of
GDPinNov09).
FederalBudgetbalanceandReserve+WellbeingFunds(%/GDP):Oilpricerebound
haltsdepletion
of
fiscal
funds.
In
Nov
09
the
combined
Reserve
and
National
Wellbeing
Fundsequalled12.1%ofGDP.
Source:MinistryofFinance,Rosstat
GrossandnetFDI($bn):OverthelasttworeportedquartersRussiahasseenan
increaseininwardFDI.In3Q09,itamountedto$12bn,down29%YoY.
Currentaccountbalance(%/GDP):Thecurrentaccountsurplusreached3.6%ofGDPin
9M09(4.4%ofGDPin3Q09,down50%YoY).
Source:CBRSource:CBR
THEECONOMY
20%
10%
0%
10%
20%
30%
2004 2005 2006 2007 2008 2009
Deficit ReserveFund+WellbeingFund
20%
10%
0%
10%
20%
30%
40%
2004 2004 2005 2006 2007 2007 2008 2009
Revenues Spending Balance
15
10
5
0
510
15
20
25
1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09
GrossFDI NetFDI
0
5
10
15
20
25
1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09
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Internationalreservesvstotalexternalshortterm
debt(%):
Russia's
total
external
short
term
debt
is
coveredeighttimesbyitsinternationalreserves.
Internationalreserves
coverage,
no.
of
months:
In
Nov09Russia'sIRcoveredmorethan20monthsof
imports(4monthsisconsideredadequate).
M2/Internationalreserves
(%):
Russia's
M2
is
almost
fullycoveredbyitsinternationalreserves(excluding
gold)
Externaldebt/GDP(%):Russia'sexternaldebt
situationis
undemanding
with
total
debt
equal
to
35%
ofGDPandgovernmentdebtonly2%ofGDP.
Externaldebt/Exportrevenue(%):Equally,the
debtlevel
when
set
against
export
revenues
remainslow.
Source:CBRSource:CBR,Rosstat Source:CBR
Source:CBR
Exportsand
imports
($bn):
Both
exports
and
imports
haverecovered.Thetradesurplusreached$11.6bnin
Nov09and$99.8bnfor11M09.
Source:CBRSource:CBR
THEECONOMY
0%
10%
20%
30%
40%
50%
1Q05 1Q06 1Q07 1Q08 1Q09
General Government
0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009
0%
40%
80%
120%
160%
200%
1Q05 1Q06 1Q07 1Q08 1Q09
General Government
0%
30%
60%
90%
120%
150%
180%
2004 2005 2006 2007 2008 2009
0%
200%
400%
600%
800%
1Q05 1Q06 1Q07 1Q08 1Q09
0
10
20
30
40
50
'00 '02 '04 '06 '08
Exports Imports
22
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Source:Rosstat Source:Rosstat,Bloomberg
Source:CBR,Rosstat
Source:CBR,Rosstat
PPIand
oil
price
(%
YoY):
The
recent
uptick
in
producerpriceinflationappearsrelatedtotheoil
pricerecovery.
M2velocity
(GDP/M2):
Velocity
of
M2
has
been
rising
recently,causedbyroublevolatilityandasharper
dropinGDPrelativetomoneysupply.
Inflation,(%YoY):CPIhasfallenamidcontracting
demand,reaching8.8%byDec09.PPIhasrisenlately
M2/GDP(%,3MAve.):Russia'smonetisationofthe
economyremainslowatjustabove30%(atNov09).
YoYgrowthofM2andM0minusYoYGDPgrowth(%):
M2is
again
growing
slightly
faster
than
GDP,
with
Russia
creapingbackintoexcessliquidityterritory.
MonetaryaggregatesM2,M0,YoY(%):M2showed
slightpositive
YoY
growth
in
Nov
09
while
M0
is
still
in
decline.
Source:CBR Source:CBR,Rosstat
THEECONOMY
15%
5%
5%
15%
25%
35%
45%
55%
65%
'00 '02 '04 '06 '08
M2 M0
80%
60%
40%
20%
0%
20%
40%
60%
1Q97 1Q99 1Q01 1Q03 1Q05 1Q07 1Q09
M2GRGDPGR M0GRGDPGR M2/GDP
0%
5%
10%
15%
20%
25%
30%
35%
40%
'00 '02 '04 '06 '08
M2/GDP
2
3
4
5
6
7
8
9
10
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '0920%
10%
0%
10%
20%
30%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
ConsumerPriceIndex ProducerPriceIndex
60%
40%
20%
0%
20%40%
60%
80%
100%
'04 '05 '06 '07 '08 '09
20%
10%
0%
10%
20%
30%
40%
Urals(lsc) PPI(rsc)
23
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Source:CBR,Rosstat Source:CBRSource:CBR
Source:CBR Source:CBR Source:CBR
Nominaldeposit
and
credit
rates
(%):
Banks
have
loweredinterestratesoncreditasaresponsetoCBR
easing;depositrateshaveyettoreact.
Realdeposit
and
credit
rates
(%):
On
the
back
of
lower
inflationthedepositrateismovingtowardspositive
territory.
Nonperforming
loans
(%/total
loans):
The
aggregateNPLratiocontinuestogrow,printing
6.4%inNov09.
Loan/depositratio(%):Theaggregateloan/deposit
ratiohas
been
declining
as
the
rise
in
deposits
has
outpacedcreditgrowth.
Loans,Depositsinroubles(%YoY):Depositsgrew
19.5%in
Nov
09
while
the
slowdown
in
credit
growth
washalted.
Loans,Depositsindollars(%YoY):Indollarterms
thegrowth
in
deposits
was
less
pronounced
and
creditsarestilldeclining.
THEECONOMY
80%
90%
100%
110%
120%
2006 2007 2007 2008 2008 2009
0%
1%
2%
3%
4%
5%
6%
7%
Dec07 May08 Oct08 Mar09 Aug09
0%
3%
6%
9%
12%
15%
18%
Jan07 Jul07 Jan08 Jul08 Jan09 Jul09
Deposits Credits
10%
7%
4%
1%
2%
5%
'04 '05 '06 '07 '08 '09
Deposits Credits
10%
0%
10%
20%
30%
40%
50%
60%
Dec07 May08 Oct08 Mar09 Aug09
TotalDepositsRUB,YoY TotalLoansRUB,YoY
30%
10%
10%
30%
50%
70%
Dec07 May08 Oct08 Mar09 Aug09
TotalDeposits,$YoY TotalLoans,$YoY
24
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KEYINDICATORS 2003 2004 2005 2006 2007 2008 2009E 2010ENominalGDP(RUBbn) 13,243 17,048 21,625 26,904 33,112 41,668 38,899 46,475
GDP($n) 432 592 764 989 1,294 1,677 1,196 1,518
GDPpercapita($) 2,984 4,116 5,342 6,943 9,109 11,808 8,457 10,776
RealGDPgrowth,(%) 7.3 7.1 6.4 7.4 8.1 5.6 7.7 5.8
Industrialoutputgrowth,(%) 8.9 8.0 5.1 6.3 6.4 2.6 9.2 5.2
Fixedinvestment (%) 12.1 14.6 10.0 15.6 22.9 13.2 14.5 5.0
Realretailsales(%) 8.8 12.1 12.8 13.9 16.0 14.0 4.4 7.3
SOCIALINDICATORS
Realdisposableincome (%) 15 11 12 13 12 3 1 8
Realwage(%) 10.3 11.2 9.9 13.4 16.2 11.0 2.8 7.0
Averagewage($/month) 180 237 302 396 531 694 575 731
Uneployment,(%
ILO) 8.6 8.2 7.6 7.2 6.1 6.4 10.3 8.7
PRICES
CPIgrowth(%Dec/Dec) 12.0 11.7 10.9 9.0 11.9 13.3 8.8 8.0
PPIgrowth(%Dec/Dec) 13.0 28.9 18.2 4.9 25.1 7.0 8.5 12.0
TRADE
Exports($n) 135.9 183.2 243.8 303.6 354.4 471.6 300.2 362.5
Imports($bn) 76 97 125 164 223 292 208 264
Tradebalance($bn) 59.9 85.8 118.4 139.3 130.9 179.7 92.0 98.2
Currentaccount($bn) 35.4 58.6 84.6 94.7 77.0 102.3 46.0 58.9
Currentaccountratio(%/GDP) 8.2 9.9 11.1 9.6 5.9 6.1 3.8 3.9
Oilprice
($/bbl,
Urals
Med,
aop) 27 34 50 61 69 95 58 73
FEDERALBUDGET
Revenues,(%/GDP) 20 20 24 23 23 22 18 17
Expenditures(%/GDP) 17.8 15.8 16.3 15.9 18.1 18.2 25.7 21.1
Fiscalbalance(%/GDP) 1.7 4.3 7.5 7.4 5.4 4.1 7.6 4.0
MONETARYINDICATORS
Grossinternationalreserves($bn) 77 125 182 304 479 427 377 398
M0(RUBbneop) 1,147 1,535 2,009 2,785 3,702 3,795 4,057 4,960
M0growth(%) 50.3 33.8 30.9 38.6 32.9 2.5 6.9 22.2
M2(RUBbn
eop) 3,213 4,363 6,046 8,996 13,272 13,493 14,700 17,714
M2growth(%) 50.5 35.8 38.6 48.8 47.5 1.7 8.9 20.5
M2/GDP(%average) 19.3 21.4 22.9 26.4 32.5 32.8 33.4 33.4
EXCHANGERATES
RUB/$(eop) 29.5 27.7 28.8 26.3 24.6 29.4 31.3 30.0
RUB/$(aop) 30.7 28.8 28.3 27.2 25.6 24.9 32.5 30.6
RUB/(eop) 36.8 37.8 34.2 34.7 35.9 41.4 44.0 43.7
R/(aop) 34.7 35.8 35.2 34.1 35.1 36.4 44.2 43.9
Realappr.(+)/depr.()RUB/$(%) 18.6 14.8 3.4 16.2 15.3 5.4 3.8 10.5
Realappr.(+)/depr.()RUB/,(%) 1.3 6.3 20.0 5.4 4.8 3.3 3.2 7.4
Source:Rosstat,
CBR,
Ministry
of
Finance,
Bloomberg,
Aton
estimates
Macroeconomicforecast
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