RC Research Portal - Top 5 Reports

Russia: RenCap-NES Leading GDP Indicator - 1Q growth stellar, but 2Q looks murkier

2010-03-10

Iraq: Iraq elections - Implications for Kurdistan oil contracts

2010-03-09

Iraq held parliamentary elections on Sunday (7 Mar). According to media outlets, the head of the Independent High Electoral Commission reported that the turnout in Sunday’s elections was 62%. The official initial results for the 325 seats in the Council of Representatives are expected to be released in the next couple of days. Although some violent disruption was reported on Sunday, overall the elections are widely considered to have been credible, and according to BBC reports, UN Secretary-General Ban Ki-moon made a visit to Iraq to congratulate voters on the outcome of nationwide local elections.

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Economic and political update

2010-03-09

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Russia: AFI Development - Company update

2010-03-09

Following AFI’s trading update we note the following: Mall of Russia progressing but retail real estate market slow: AFI is continuing to make progress with construction at its Mall of Russia and Tverskaya Zastava Shopping Centre developments. Mall of Russia is now 45% let compared with 40% at the time of AFI’s last update in January, and is scheduled to be completed in September/October, consistent with previous comments. The pace of lettings should accelerate as completion nears; however, not only is the retail lettings market still slow, but Mall of Russia’s sheer scale (115,000 m2 GLA, around 300 units) leaves much to be done in terms of logistics alone. In addition, the achievability of the targeted rent of $1,100 m2 is unclear. At Tverskaya Zastava AFI has now received the first payments from the City of Moscow for its previously made investment, though here, too, progress generally appears slow.

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FSU oil and gas monitor

2010-03-09

Ukraine gas price in the spotlight. Newly elected Ukrainian President Viktor Yanukovich, visited Moscow on Friday (5 Mar). Although no formal discussions on the gas price were initiated this time, Yanukovich was quoted by RBC Daily as saying that a price close to $168/mcm (the price paid by Belarus) would be fairer (compared with the previously reported 1Q10 price of $306/mcm). We think Russia is unlikely to agree to amend its terms of sale to Ukraine, as we believe Yanukovich's position on the issue is weak. First, our macro team believes that neither Ukraine's current account nor the hryvnia are currently under pressure, and that capital account issues are likely to be resolved when the IMF’s assistance programme for Ukraine resumes. Second, Russia has already granted material concessions to Ukraine under existing contracts (i.e. no fines for low offtake in 2009). Even in the unlikely scenario that the gas price is reduced, we expect no material negative impact on Gazprom's financials. We currently assume in our model that Gazprom is making no margin on the re-export of Central Asian gas to Ukraine. If the Ukraine price is reduced, we would expect Russia to negotiate better terms with Central Asian producers as well.

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