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France: LVMH - FY11: Pulling out all the stops
LVMH announced FY11 results yesterday (2 February). The company reported diluted EPS of EUR6.23 (+23% YoY), in line with our estimate, and raised its full-year dividend 24% to EUR2.60/share. The key takeaway is that sales growth slowed only marginally in 4Q11, in line with our projection of a soft landing in 2012. Full version |
3 February 2012
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Global: GEM Fund Flows Weekly - Money flowing back to Russia
Inflows remain buoyant. Investors’ concerns regarding the deadlock over Greek debt were mitigated by another European summit, and inflows to global equity and balanced funds remained strong at $3.7bn. Full version |
3 February 2012
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Kazakhstan: ENRC - Two’s company... three’s a crowd?
Glencore-Xstrata-ENRC: If Glencore bids for and eventually merges with Xstrata, we think a similar bid for ENRC is unlikely in the foreseeable future. We suspect Glencore has considered the acquisition of a stake in ENRC at some point, but a Glencore-Xstrata merger (if it even happens) would make it difficult for Glencore to sustain any interest in ENRC, given the potential regulatory hurdles that such market concentration would bring. Xstrata is the largest ferrochrome producer in the world (16% of global ferrochrome), while ENRC is the second largest (around 13%). In early 2011, The Sunday Times and Bloomberg reported on Glencore’s possible acquisition of a sizeable ENRC stake. Although Glencore did not confirm any plan to bid for ENRC, the UK Takeover Panel responded on 15 June by barring it from making a bid for six months – a restriction that we believe expired at the end of last year. Full version |
3 February 2012
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Mongolian Mining Corp - Baruun Naran commissioned
Earlier production. Mongolian Mining Corporation (MMC) has announced the commissioning of its Baruun Naran mine and expects RoM production of 1mn tpa in 2012. Raw coking coal will be trucked 30 km to the UHG mine where the coal will be washed using the existing coal handling and preparation plant (CHPP) which is ramping up its second 5mn tpa module. MMC believes the CHPP has scope to operate c. 20% above nameplate capacity based on current washing rates allowing for processing of some Baruun Naran coal. Production from Baruun Naran should lift MMC’s total 2012 RoM production to 11mnt and we forecast washed/unwashed coking coal sales of 6.7mnt/0.6mnt. Full version |
3 February 2012
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Russia/Poland: CEDC – Decision time
Russian Standard proposes debt-for-equity, assets-for-equity swaps, to get 33% of CEDC. On 1 February, Russian Standard (RSC) filed new details on its previously proposed alliance with CEDC, with the US Securities and Exchange Commission. RSC proposes a two-phase deal: in phase one, RSC would receive 14.7mn newly issued shares, in exchange for $103mn of 2013 convertible senior notes that RSC purchased from the market, at $7.0/share (57% premium to $4.46/share, at 1 February’s close). RSC would also refinance the remaining $207mn of 2013 senior notes, if needed. RSC’s stake in CEDC would increase to 25.1% post-dilution (vs 9.9% currently), with CEDC minorities 20%-diluted at this stage. Full version |
3 February 2012
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Russia: In a nutshell - A leg up on the rollercoaster ride
A positive comeback after a poor December. The MSCI Russia Index (MXRU) recovered lost ground in January (+14.8% MoM), with the RTS index (+14.1% MoM) following a close second after a turbulent December which saw investor nervousness around Russian politics impacting Russian markets. Market volume also picked up (+21.4% MoM) in January with a $1.7bn average daily traded value. However, this was still below the 2011 average daily traded value of $2.1bn. Full version |
3 February 2012
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