Market the day before
The dynamics were mixed. The leaders of growth amid preparations for UMC’s IPO were the shares of Mother and Child (MDMG 870.50, + 6.29%). Lenzoloto (LNZL 24 490, -7.52%) was among the outsiders even before the shareholder register was closed to receive the dividend. The USD / RUB pair closed near the high since the beginning of May.
Market and company news
Preferred shares of Surgutneftegaz (SNGSP 324.15, -7.27%, target: RUB 86) renewed their maximum. The company still costs significantly less than its book value. Its shares can be viewed as defensive and as a chance to realize more than double the fundamental growth potential in the future.
MTS (MTSS 324.15, -7.27%, purchase, target for 12 months: 390 rubles). The company’s shares dropped by at least a month and a half amid the closing of the dividend register. MTS revenue growth for the year is forecasted within 5%. At the same time, a number of large banks filed lawsuits against the company in the amount of about 2 billion rubles. If the court takes the side of the plaintiffs or an amicable agreement is reached, similar processes are not excluded based on statements by other major players in the financial sector. In our opinion, even if the development of events is negative for MTS, the pressure on the company’s free cash flow, which is estimated at RUB 44-72 bn, will be insignificant. Dividends will remain at 28 rubles. per share. We admit the short-term impact of negative technical factors, but the correction will create interesting buying opportunities for investment purposes.
Bashneft, ap (BANEP 1 115, -0.93%, spec. Purchase, target: 1250 rubles). Over the year, the company’s quotes fell by 40% in the absence of fundamental negative. The last week saw the sale of a large number of shares, which is similar to the closing of the positions of a large player. According to our assumptions, there is a significant rebound in quotes ahead.
We forecast mixed dynamics. The benchmark for the USD / RUB pair is 73.50-74.50, for the Moscow Exchange index: 3850-3900 points.
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