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MSCIindices,Currentindexlevelvs5Yaverage:
Comparedtoits5Yaverage,theMSCIRUIndexis
currentlyamongthelowestlevelofanyEM.
MSCI
Indices,
1M
performance:
Over
the
past
month
theMSCIRussia(down4%)hasoutperformedwithin
theEMuniverse.
MSCI
indices,
3M
performance:
Over
the
past
three
monthstheMSCIRussiahasgainedonly0.1%
18%15%
15%13%13%12%
12%12%
12%10%10%10%
9%7%
6%4%
BrazilPoland
HungaryChina
ArgentinaTaiwan
S.AfricaIndia
MSCIEMKorea
MexicoCzechRep
TurkeyIndonesia
ThailandRussia
13%13%
11%9%
8%8%
3%2%
1%0%0%0%
2%2%
4%5%
Czech ReBrazil
ArgentinaPoland
HungaryChina
MSCIEMS.
Africa
TaiwanRussia
IndiaMexico
ThailandKorea
TurkeyIndonesia
22%18%16%15%
6%4%
1% 4%
7%7%7%
10%19%19%
28%45%
PolandHungary
RussiaArgentina
CzechTaiwan
KoreaMexico
S.AfricaThailand
EMTurkey
ChinaIndia
BrazilIndonesia
STOCKM
Russianindicesperformance(%):YtDtheRTSIndex($)is
down2.3%,MICEX(RUB)down1.0% andtheRDXIndex
($)down0.76%.
Source:
Bloomberg,
5
Feb
2010 Source:
MSCI,
Bloomberg,
5
Feb
2010Source:
MSCI,
Bloomberg,
5
Feb
2010
MSCIRUperformancevsEM,GlobalOil(%):YtDthe
Russianmarkethasoutperformed(1.9%)boththe
MSCIEM(9.3%)andAMEXOil(6.4%)indices.
Russianmarketvolatility,90Days
Source:MSCI,Bloomberg,5Feb2010 Source:MSCI,Bloomberg,5Feb2010 Source:MSCI,Bloomberg,5Feb2010
20% 15% 10% 5% 0%20% 10% 0% 10%
30%
0%
30%
60%
90%
120%
Jan09 Apr09 Jul09 Oct09 Jan10
MSCIRussia MSCIEM AMEXOIL
30%
0%
30%
60%
90%
120%
150%
Jan09 Apr09 Jul09 Oct09 Jan10
RTS Micex RDX
30% 10% 10% 30% 50%
0
20
40
60
80
100
Jan07 Oct07 Jul08 Apr09 Jan10
RTS MSCIWorld MSCIEM
RKE
TPERFORMANC
E
2
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MSCIRussiaEnergyIndexrelativetoMSCIEM
Energy:YtDRussianEnergystockshaveoutperformed
theirEMpeersby8%.
MSCIRussiaMaterialsIndexrelativetoMSCIEM
Materials:YtDRussianMaterialshaveoutperformed
theirEMpeersby15%.
MSCIRussiaFinancialsIndexrelativetoMSCIEM
Financials:Russia'sbestperformingsectorin2009
hasoutperformeditsEMpeers12%YtD.
STOCKM
0.9
1.0
1.1
0.8
0.9
1.0
1.1
1.2
1.3
1.4
0.8
1.0
1.21.4
1.6
1.8
2.0
2.2
MSCIRussiaTelecomsIndexrelativetoMSCIEM
Telecoms:YtDRussianTelecomshave
underperformedtheirEMpeersby1%.
Source:MSCI,Bloomberg,5Feb2010Source:MSIC,Bloomberg,5Feb2010Source:MSCI,Bloomberg,5Feb2010
MSCIRussiaHealthCareIndexrelativetoMSCI
EMHealthCare:YtDMSCIRussiaHealthCarehas
underperformeditsEMpeersby17%.
Source:
MSCI,
Bloomberg,
5
Feb
2010 Source:
MSCI,
Bloomberg,
5
Feb
2010 Source:
MSCI,
Bloomberg,
5
Feb
2010
MSCIRussiaConsumerStaplesIndexrelativetoMSCI
EMConsumerStaples:YtDRussianConsumerStaples
nameshaveunderperformedtheEM's6%.
RKE
TPERFORMANC
E
.
Jan09 Mar09 May09 Aug09 Oct09 Jan10
.
Jan09 Mar09 May09 Aug09 Oct09 Jan10
.
Jan09 Mar09 May09 Aug09 Oct09 Jan10
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Jan09 Mar09 May09 Aug09 Oct09 Jan10
0.7
0.8
0.9
1
1.1
1.21.3
1.4
1.5
1.6
1.7
Jan09 Mar09 May09 Aug09 Oct09 Jan10
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jan09 Mar09 May09 Aug09 Oct09 Jan10
3
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MSCIRussia:1Mperformancebysector(%) MSCIRussia:3Mperformancebysector(%) MSCIRussia:12Mperformancebysector(%)
94%
115%
133%
161%
199%
219%
241%
505%
Energy
Telecoms
MSCIRussia
Utilities
Materials
HealthCare
ConsStaples
Financials
STOCKM
18%
16%
12%
5%
4%
2%
0%
1%
ConsStaples
HealthCare
Telecoms
Energy
MSCIRussia
Financials
Materials
Utilities
9%
6%
4%
0%
2%
10%
19%
22%
Healthcare
Telecoms
Energy
MSCIRussia
Materials
Utilities
ConsStaples
Financials
Source:
MSCI,
Bloomberg,
5
Feb
2010 Source:
MSCI,
Bloomberg,
5
Feb
2010Source:
MSCI,
Bloomberg,
5
Feb
2010
MSCIRussia:Sectorcorrelationswithoilprice(rolling
correlationofweeklychanges)MSCIRussia:CorrelationwithMSCIEMandMSCI
Worldindices(rollingcorrelationofweeklychanges)
MSCIRussia:Correlationwithoilprice(rolling
correlationofmonthlychanges)
Source:MSCI,Bloomberg,5Feb2010Source:MSCI,Bloomberg,5Feb2010 Source:MSCI,Bloomberg,5Feb2010
0% 200% 400%RKE
TPERFORMANC
E
25% 15% 5% 5% 15% 5% 5% 15% 25%
0.0
0.2
0.4
0.6
0.8
1.0
'02 '03 '04 '05 '06 '07 '08 '09 '10
MSCIEM MSCIWorld
0.2
0.0
0.2
0.4
0.6
0.8
1.0
'02 '03 '04 '05 '06 '07 '08 '09 '10
0.1
0
0.1
0.2
0.30.4
0.5
0.6
0.7
Jul06 Mar07 Dec07 Aug08 May09 Jan10
Energy Financials
Materials Telecom
Cons.staples
4
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RTSperformance,1M(%)MICEXperformance,1M(%)
STOCKM13%12%11%
10% 8% 8%8%
5% 4% 3%
4% 5% 6%6% 8%
10% 12%13%
17%
29%
20%
10%
0%
10%
20%
30%
40%
CI
N N ZL
KC K
GS H S
PTL
BR
KA N E
L R N SP S
IKE F
TOPBOTTOM
14%14%12%9% 9% 8% 7%
6% 6% 5%
13%14% 15%
19% 20%
25%34%
35%35% 37%
25%
5%
15%
35%
IBN
KC
N V TP
NT K T
L H FP
KA
SP N K
S H N LR O F O
TOPBOTTOM
RDXperformance,1M(%)
Source:
Bloomberg,
5
Feb
2010
Source:Bloomberg,5Feb2010 Source:Bloomberg,5Feb2010
RKE
TPERFORMANC
E
R SI
RO P
OG
NL
SN
LK
SNG
PM V
TUR
GM V
THY
MA R
A UOG
CH
SO
RO
SV
NM
MG
NL S
PLK
TR
UR
RA
MA A
F
MR
AK
MT
VS
CH
ES
20%
16% 14%
11% 11% 10%9% 8%
7% 6%5%
2%2%
1%
7%
25%
20%
15%
10%5%
0%
5%
10%
ROSN
SGGD
NLMK
URKA
OGZD
LKOD
ATAD
PLZL
NVTK
VTBR
MNOD
SSA
EVR
HYDR
SVST
TOPBOTTOM
5
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MICEXliquidity($mn):LiquidityontheMICEXhasrecoveredfromitsrecentlowatend
2008/beginningof2009,withanaveragedailytradedvolumeof$1,795mnoverthepast11
months.
RTSliquidity($mn):LiquidityontheRTSin2H09onlyslightlyimprovedon1H09and
remainswellbelowitsprecrisislevel(Note:dataisfortheRTSClassicaIndex).
0
1,000
2,000
3,000
4,000
5,000
6,000
Ave.value=$2,197
Ave.value=$856
Ave.value=$1,795
0
20
40
60
80
100
120
Ave.value=$44
Ave.value=$11
Ave.value=$14
MA
Source:
Bloomberg,
Aton
estimates,
5
Feb
2010
RDXliquidity($mn):WhiletheliquidityinGDRs,representedherebytheRDXIndex,
hasrecoveredsomewhatfromitsrecentlow,liquidityremainswellshortofitspre
crisislevel.
Source:Bloomberg,Atonestimates, 5Feb2010 Source:Bloomberg,Atonestimates, 5Feb2010
Jan08 Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10
0
1,000
2,000
3,000
4,000
5,000
Jan08 Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10
Ave.value= $586
Ave.value= $1,664
Ave.value= $854
Jan08 Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10 KET
LIQUIDITY
6
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12MFWDP/E:Witha12MforwardP/Eof7.9x,Russia
looksattractivewithintheEMuniverse.
P/BV2010E:At1.0xRussiahasthelowestP/BVratio
comparedtoitsEMpeers.
EV/EBITDA2010E:Thesameistrueforthe
EV/EBITDAratio,whichat5.1x,remainsthelowest
withintheEMspace.
MAR
7.99.09.29.3
9.910.410.4
10.911.9
12.312.712.813.0
13.414.7
16.2
RussiaTurkey
ArgentinaKorea
HungaryThailand
CzechS.Africa
EMPoland
BrazilChina
IndonesiaMexicoTaiwan
India
1.01.2
1.31.4
1.51.61.6
1.81.81.8
2.02.12.1
2.32.9
RussiaHungary
KoreaPoland
ThailandTurkey
S.Africa
ArgentinaEM
TaiwanBrazilChinaCzech
MexicoIndia
5.1
5.9
6.5
6.5
6.56.8
6.7
7.2
7.6
7.9
8.1
9.4
10.3
Russia
Czech
Turkey
China
IndonesiaBrazil
Thailand
Mexico
EM
Poland
S.Africa
Hungary
India
PEGratio2010E:On2010earningsgrowthadjustedP/E,RussiarelativetootherEM
countrieshasthesecondlowestPEGratioat0.22x.
Source:MSCI,Bloomberg, 5Feb2010 Source:MSCI,Bloomberg, 5Feb2010 Source:MSCI,Bloomberg, 5Feb2010
P/CF2010E:Inaddition,Russia'sP/CFratioof5.1xisoneofthelowestintheemerging
world.
Source:
MSCI,
Bloomberg,
5
Feb
2010Source:
MSCI,
Bloomberg,
5
Feb
2010
ETV
ALUATIONS
0 5 10 15 200.0 1.0 2.0 3.0
2.53.8
5.15.7
6.37.4
8.58.78.8
12.213.5
16.418.4
21.726.1
26.9
0 3 6 9 12 15 18 21 24 27 30
TurkeyCzechRussia
PolandHungary
MexicoS.Africa
BrazilEM
TaiwanKoreaIndia
ArgentinaThailand
ChinaIndonesia
0 5 10
0.190.22
0.250.29
0.470.56
0.61 0.71
0.750.76
0.790.80
0.951.04
0 0.2 0.4 0.6 0.8 1
TaiwanRussiaKorea
ArgentinaEM
ChinaBrazilHungary
PolandThailand
TurkeyS.Africa
IndonesiaMexico
Indonesia
7
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12MforwardP/E;currentvs6Mago:Russia's12M
forwardP/Es(aggregateaswellasforindividual
sectors)haveseenamoderatecontractionoverthe
astsixmonths.
12MforwardP/E:Russia'slowaggregatemarketP/E
of7.9xisheavilyinfluencedbythelowP/EforEnergy
names(6.2x).
12MforwardP/Ediscount/premiumvsEM:
Russiatradesata32%discounttoEM(Energy
30%,Materials24%).
MAR0
10
20
30
T Y L S H
12MFWDP/E 12MFWDP/E6MAgo
6.2
12.6
18.6
8.4
12.2
13.3
8.9
12.4
16.1
11.1
13.4
11.3
ENERGY
MATERIALS
CONSSTAPLES
TELECOMS
HEALTHCARE
FINANCIALS
EM Russia
30%
24%
9%
2%
16%
18%
ENERGY
TELECOMS
HEALTHCARE
MATERIALS
CONSSTAPLES
FINANCIALS
P/BV2010E:Discount/premiumvsEMpeers
Source:MSCI,Bloomberg, 5Feb2010Source:MSCI,Bloomberg, 5Feb2010
Source:MSCI,Bloomberg, 5Feb2010Source:MSCI,Bloomberg,5Feb2010
Source:MSCI,Bloomberg, 5Feb2010
P/BV2010Evs2011E:Themarketcurrentlyexpectsamarginalexpansionofbookvalue
in2011withinallsectors.
KETV
ALUATIONS
MARKE
Aggr.
ENERG
MATERIA
SCONS
STAPLE
TELECO
S
HEALT
CARE
FINANCI
LS
7.9.
0 5 10 15 20 25
ggr.
41%
39%
38%
1%
15%
16%
50% 40% 30% 20% 10% 0% 10% 20%
ENERGY
MARKETAggr.
UTILITIES
MATERIALS
TELECOMS
FINANCIALS
32%
50% 20% 10% 40%
ggr.
0
1
2
3
TELECOM
S
MATERIAL
S
FINANCIA
LS
MSCI
RUSSIA
ENERGY
UTILITIES
2010 2011
8
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MSCIRussia,EV/EBITDA2010Evs2011EMSCIRussiavsEMindices,EV/EBITDA2010E
MAR
3.7
4.65.2
5.8
8.0
2.6
3.9
4.34.9
7.3
2
4
6
8
10
2010 2011
3.7
4.6
5.2
5.8
8.0
6.8
5.7
7.6
7.6
5.0
UTILITIES
ENERGY
MARKETAggr.
MATERIALS
TELECOMS
EM Russia
MSCIRussiaP/CF,2010Evs2011E
Source:MSCI,Bloomberg, 5Feb2010Source:MSCI,Bloomberg, 5Feb2010
MSCIRussiavsEMindices,P/CF2010E
Source:MSCI,Bloomberg, 5Feb2010Source:MSCI,Bloomberg, 5Feb2010
KETV
ALUATIONS
UTILITIES ENERGY MARKETAggr. MATERIALS TELECOMS0 2 4 6 8 10 12
4.55.3
3.9
9.08.2
8.9
4.14.6
3.4
6.57.1
6.4
0
2
4
6
8
10
12
ENERGY MARKETAggr. TELECOMS UTILITIES MATERIALS FINANCIALS
2010 2011
4.5
5.3
3.9
9.0
8.2
8.9
6.3
7.4
5.1
6.9
8.0
7.2
0 2 4 6 8 10
ENERGY
MARKETAggr.
TELECOMS
UTILITIES
MATERIALS
FINANCIALS
EM Russia
9
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MSCIRussiaEnergyandEMEnergy12Mforward
EPS(Jan2008=100)
MSCIRussiaMaterialsandEMMaterials12M
forwardEPS(Jan2008=100)
MSCIRussiaandEM12MforwardEPS(Jan
2008=100)
70
90
110
130
150
Russia EM
70
90
110
130
150
170Russia EM
50
70
90
110
130
150
170Russia EM
CO
Source:MSCI,Bloomberg, 5Feb2010 Source:MSCI,Bloomberg, 5Feb2010
Source:MSCI,Bloomberg, 5Feb2010 Source:MSCI,Bloomberg, 5Feb2010
Source:MSCI,Bloomberg, 5Feb2010
Source:MSCI,Bloomberg, 5Feb2010
MSCIRussiaConsumerStaplesandEMConsumer
Staples12MforwardEPS(Jan2008=100)
MSCIRussiaTelecomsandEMTelecoms12M
forwardEPS(Jan2008=100)
MSCIRussiaFinancialsandEMFinancials12M
forwardEPS(Jan2008=100)
Jan08 May08 Oct08 Mar09 Aug09 Jan10 Jan08 May08 Oct08 Mar09 Aug09 Jan10 Jan08 May08 Oct08 Mar09 Aug09 Jan10
PANY
EARNINGS
40
50
60
70
80
90
100
110
120
Jan08 May08 Oct08 Mar09 Aug09 Jan10
Russia EM
50
60
70
80
90
100
110
120
Jan08 May08 Oct08 Mar09 Aug09 Jan10
Russia EM
0
20
40
60
80
100
120
140
Jan08 May08 Oct08 Mar09 Aug09 Jan10
Russia EM
10
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Earningsgrowth,2010E(%):Theconsensus(I/B/E/S)earningsoutlookforFY10expects
RussiatoseeamongthehighestearningsgrowthintheEMuniversein2010.
Earningsgrowth,2011E(%):Thesameistruefor2011,with32%earningsgrowth
expected
CO
12%13%
14%14%
15%16%
20%
20%22%
25%25%
31%37%
37%
TurkeyMexico
ThailandIndonesia
HungaryPoland
Brazil
ArgentinaChinaIndia
EMS.Africa
RussiaKorea
10%17%
18%18%
19%20%20%
21%24%24%
29%29%
31%32%
KoreaChina
TurkeyThailand
ArgentinaIndonesia
Mexico
EMBrazil
PolandS.Africa
IndiaHungary
Russia
Indonesia
Indonesia
Source:MSCI,Bloomberg, 5Feb2010 Source:MSCI,Bloomberg,5Feb2010
PANY
EARNINGS
0% 5% 10% 15% 20% 25% 30% 35% 40% 0% 5% 10% 15% 20% 25% 30% 35%
11
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Oilprice(Brent$/barrel) Goldpriceandinventories Nickelpriceandinventories
C0
20
40
6080
100
120
140
160
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
400
600
800
1,000
1,200
1,400
Inventories, oz(rhs) Price,$/oz(lhs)
20,000
40,000
60,000
80,000
100,000
120,000
10,200
20,200
30,200
40,200
50,200
Inventories,tonne(rhs) Price,$/tonne,(lhs)
Source:Bloomberg, 5Feb2010Source:Bloomberg, 5Feb2010 Source:Bloomberg, 5Feb2010
Source:Bloomberg, 5Feb2010
Steelprice
(CIS
Export
HR
Coil
$/tonne) Copper
price
and
inventories
Source:Bloomberg, 5Feb2010
Aluminiumprice
and
inventories
Source:Bloomberg, 5Feb2010
OMM
ODITIES
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
0
200
400
600
800
1,000
1,200
'01 '02 '03 '04 '05 '06 '07 '08 '09 '100
200,000
400,000
600,000
800,000
1,000,000
1,200
3,200
5,200
7,200
9,200
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Inventories,tonne(rhs) Price,$/tonne(lhs)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
1,200
1,700
2,200
2,700
3,200
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Inventories, tonne(rhs) Price,$/tonne(lhs)
12
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Platinumprice($/oz) Palladiumprice($/oz) Silverpriceandinventories
C800
1,300
1,800
2,300
300
600
900
1,200
90,000
100,000
110,000
120,000
130,000
140,000
5
10
15
20
25
Inventories, 1000oz(rhs)
Price,$/oz(lhs)
Source:Bloomberg, 5Feb2010
Source:Bloomberg, 5Feb2010Source:Bloomberg, 5Feb2010 Source:Bloomberg, 5Feb2010
Source:Bloomberg, 5Feb2010
BalticDry
Index
and
HSBC
Global
Steel
Index Selected
Reuters
commodity
indices
OMM
ODITIES
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
,
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
100
100
300
500
700
900
1,100
1,300
1,500
0
2,000
4,000
6,000
8,000
10,000
12,000
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
BalticDryIndex(lhs)
GlobalSteelHSBCIndex(rhs)
150
250
350
450
550
150
300
450
600
750
900
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
CRBSpotmetals(lhs)
CRBSpotallcommodities (rhs)
CRBRawIndustrials (rhs)
13
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RealRUB/USDandRUB/EURexchangerates(Dec97=100)OfficialRUB/USDandRUB/EURexchangerates
20
25
30
35
40
45
50
RUB/USD RUB/EUR RUB/basket
70
90
110
130
150
2003 2004 2005 2006 2007 2008 2009
RealRUB/USD RealRUB/EUR
Source:CBR
Source:CBR,Bloomberg, 5Feb2010 Source:CBR,Bloomberg, 5Feb2010
Source:CBR,Atonestimates
1MchangeinmajorEMandfrontiermarketcurrencies(%) 12MchangeinmajorEMandfrontiermarketcurrencies(%)
URR
ENCIES
0.3%0.0%
0.0%0.7%
1.0%1.1%
1.4%1.7%
2.1%2.5%
2.6%3.8%
4.7%5.0%
5.2%6.4%
6.9% 8.6%
1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
KazakhstanChina
ThailandTaiwan
IndonesiaArgentina
PhilippinesMalaysia
RussiaKorea
MexicoTurkey
CzechEstoniaPoland
S.AfricaHungary
Brazil
appreciation depreciation
18.8%18.2%
15.4%7.2%
4.5%3.9%
2.2%2.0%
0.8%0.7%
0.4%0.0%
0.9%2.1%
3.6%
5.4%11.2%
22.4%
25% 20% 15% 10% 5% 0% 5% 10% 15% 20% 25%
BrazilS.Africa
IndonesiaKorea
ThailandMexicoTaiwan
PhilippinesTurkeyMalaysia
CzechChina
PolandEstonia
RussiaHungary
ArgentinaKazakhstan
appreciation depreciation
14
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15/27
Monetarypolicyrates;levelsandchangefromprecrisis
peak(%):TheCBRheldtherefinancingratesteadyin
Januar at8.75%.
KeyratedifferencewithUSFedFundsRates(%):
RussiaandBrazilstillseethebiggestdifferentialvsthe
FedFundsrate.
PolicyrateinBRIC(%):Russiastartedratecuts
laterthanotherBRICcountries,andwesee
another75100b tsbein cutin1Q10.
1.82.0
2.0
3.5
4.04.5
4.8
6.0
6.5
7.0
7.0
8.8
8.8
5.2
2.5
3.3
1.5
2.5
2.0
3.8
4.3
5.5
10.3
4.0
5.0
5.04.3
China
KoreaMalaysia
PolandPhilippines
Mexico
IndiaHungary
Turkey
Kazakhstan
S.Africa
Brazil
Russia
Current
rates
Changesince
precrisis
peak
0.31.61.81.8
3.33.8
4.3
4.55.8
6.36.86.8
8.58.5
BulgariaChinaKorea
MalaysiaPoland
PhilippinesMexico
IndiaKazakhstan
S.AfricaHungary
TurkeyBrazil
Russia
2
4
6
810
12
14
16
18
20
Russia
Brazil
India
China
IN
TERESTR
5YCDSspread1Mchange(bpts)
Source:CBR,Bloomberg Source:CBR,Bloomberg Source:CBR,Bloomberg
Source:
Bloomberg,
5
Feb
2010
Russia's5YCDSspread(bpts)
Source:
Bloomberg,
5
Feb
2010Source:
Bloomberg,
5
Feb
2010
Current5YCDSspreadsbycountry(bpts)
213
100
300
500
700
900
1100
1300
Aug08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10
213
0 50 100 150 200 250 300
BulgariaChina
HungaryKazakhstan
BrazilTurkey
KoreaRussia
MexicoArgentina
EstoniaCroatiaPoland
PhilippinesIndonesia
SouthAfricaCzechRepublic
MalaysiaThailand
.
15 10 5 0 5 100 5 10
44.6
70 20 30 80 130 180
ChinaKoreaBrazil
MexicoBulgariaHungary
RussiaTurkey
PolandKazakhstan
CzechRepublicMalaysia
EstoniaThailand
SouthAfricaPhilippines
IndonesiaCroatia
0
2005 2006 2007 2008 2009 2010
TES/RISKINDICATO
RS
15
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MosPrimeRates
Cost
of
equity
(bpts):
Russia
5Y
CDS
spread
x
RTS
IndexexcessvolatilityoverS&P500volatility
Russia30YEurobondspread(bpts)
IN
TERESTR300
600
900
1,200
1,500
1,800
420
5
10
15
20
25
30
MosPrimerateO/N(%) MosPrimeRate3M(%)
200
400
600
800
1,000
1,200
1,400
110
REPOrate,
Overnight
Source:Bloomberg,Atonestimates, 5Feb2010
Source:Bloomberg, 5Feb2010
Source:Bloomberg, 5Feb2010Source:Bloomberg, 5Feb2010
TES/
RISKINDICATO
RS
'04 '05 '06 '07 '08 '09 Jan08 May08 Oct08 Mar09 Aug09 Jan10
5
7
9
11
13
15
17
19
Jan08 May08 Oct08 Mar09 Aug09 Jan10
RUBSWAPO/N(%) REPORateO/N(%)
'01 '02 '03 '04 '05 '06 '07 '08 '09
16
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QuarterlyGDPrealgrowthrate(%YoY):Accordingto
Rosstat,GDP
dropped
7.9%
in
FY09,
suggesting
about
a2%dropin4Q09
NominalGDP(RUBbn):NominalGDPequalled
RUB10.9trnin
4Q09,
and
for
FY09
amounted
to
RUB39.2trn,accordingtoRosstatestimates.
QuarterlyBRICGDPgrowth(%YoY)*:Withinthe
BRICquartet,
Russia
is
still
the
only
country
not
seeinggrowthrevertingtopositive
T15%
10%
5%
0%
5%
10%
15%
5,000
6,000
7,0008,000
9,000
10,000
11,000
12,000
8
3
2
7
12
Brazil China India Russia
Source:Rosstat,Bloomberg
Source:Rosstat Source:Rosstat
Source:IMF,*Atonestimates
GDPrealgrowthratein9M09(%YoY):Witha9.9%contractioninGDPin9M09,Russia
wasoneoftheworstaffectedeconomiesduringtherecentrecession.
2010GDPgrowthestimate(%):However,weexpectastrongreboundinGDPgrowth
in2010(6.4%) thethirdhighestgrowthratewithinEM
Source:Rosstat,Bloomberg.
HEEC
ONOMY
15.69.9
8.67.1
1.71.31.20.9
0.20.3
0.50.70.91.2
1.84.2
6.9 10.7
20 15 10 5 0 5 10
EstoniaRussia
TurkeyHungary
KazakhstanMexico
ThailandSouthAfrica
KoreaArgentina
BrazilTaiwan
MalaysiaPoland
PhilippinesIndonesia
IndiaChina
2.60.9
0.971.5
1.72.0
2.22.5
3.23.6
3.73.73.7
4.04.7
6.47.7
10.0
4 2 0 2 4 6 8 10 12
EstoniaHungary
PhilippinesArgentina
SouthAfricaKazakhstan
PolandMalaysia
IndonesiaKorea
TaiwanThailand
TurkeyMexico
BrazilRussia*
IndiaChina
1Q00 4Q01 3Q03 2Q05 1Q07 4Q08
,
1Q05 1Q06 1Q07 1Q08 1Q09
'01 '02 '03 '04 '05 '06 '07 '08 '09
*ForBrazilandIndiathemostrecentdataarefor3Q09,forChinatheyare4Q09.ForRussia,ourestimatefor4Q09isbasedonRosstat'sFY09realGDPgrowthandconfirmed9M09growth 17
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PMI:Themanufacturingsectorexpandedin
January(a
reading
above
50)
after
three
consecutivemonthsofdecline.
Structureofindustrialproduction(%YoY):Allthree
segmentsresumed
positive
growth
in
Dec
2009.
Manufacturingledtherecovery.
Industrialproductionandfixedinvestment(%YoY):
IPgrew
2.7%
YoY
in
Dec
2009
(positive
for
asecond
straightmonth);FIfell8.9%YoY.
T25%
15%
5%
5%
15%
25%
IndustrialProduction FixedInvestment
15%
5%
5%
15%
25%
Mining Manufacturing BasicServices
30
35
40
45
50
55
60
65
Services
Manufacturing
Source:Rosstat Source:Rosstat Source:Rosstat,Atonestimates
Source:VTB
Realdisposable
income,
Real
wage,
Retail
sales
(%
YoY):Decemberdataconfirmthattherecoveryin
demandrelatedindicatorsiscontinuing.
Fixedinvestment
(%/GDP):
Fixed
investment
as
a
percentageofGDPhashoveredaround20%,one
ofthelowestintheEMspace.
Unemploymentrate(%):Unemploymentroseforthe
thirdmonthandtotalled8.2%inDec2009.
Source:Rosstat Source:Rosstat
HEEC
ONOMY
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
15%
5%
5%
15%
25%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
RealDisposableIncome
RealWage
RetailSales
'02 '03 '04 '05 '06 '07 '08 '09
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 '02 '03 '04 '05 '06 '07 '08 '09
Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10
18
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FederalBudget(%/GDP):Afterpostingafiscaldeficitof6.1%/GDPin2009,Russia
recordedasurplus
of
2.6%/GDP
in
Jan
2010.
However,
spending
tends
to
be
low
in
January,hencewedonotexpectasurplustobemaintainedgoingforward.
FederalBudgetbalanceandReserve+WellbeingFunds(%/GDP):In2009the
combinedfiscal
fund
(reserve
and
national
well
being)
lost
$73bn.
In
the
month
of
Januaryitfellanother$900mnto$151.2bn.
T
10%
0%
10%
20%
30%
Deficit ReserveFund+WellbeingFund
20%
10%
0%
10%
20%
30%
40%
50%Revenues Spending Balance
GrossandnetFDI($bn):OverthepasttworeportedquartersRussiahasseenan
increaseinincomingFDI.In3Q09,itamountedto$12bn,down29%YoY.
Currentaccountbalance(%/GDP):Thecurrentaccountsurplusreached3.9%ofGDPin
2009,down53%from2008
Source:CBRSource:CBR
Source:MinistryofFinance,Rosstat Source:MinistryofFinance,Rosstat
HEEC
ONOMY
2004 2005 2006 2007 2008 2009 20102004 2005 2006 2007 2008 2009 2010
15
10
5
0
510
15
20
25
1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09
GrossFDI NetFDI
0
5
10
15
20
25
1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09
19
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Internationalreservesvstotalexternalshortterm
debt(%):
Russia's
total
external
short
term
debt
is
coveredei httimesb itsinternationalreserves.
Externaldebt/GDP(%):Russia'sexternaldebt
situationis
undemanding
with
total
debt
equal
to
33%
ofGDPand overnmentdebtonl 2%ofGDP.
Externaldebt/Exportrevenue(%):Equally,the
debtlevel
vs
export
revenues
demonstrated
a
fourthconsecutive uarterl decline.
T0%
10%
20%
30%
40%
50%
General Government
0%
40%
80%
120%
160%
200%
General Government
0%
200%
400%
600%
800%
Source:CBR
Source:CBR
Exportsand
imports
($bn):
Both
exports
and
imports
haverecovered.Thetradesurplusreached$12.7bnin
Dec2009and$112.1bnforFY09.
Source:CBRSource:CBR
Internationalreserves
coverage,
no.
of
months:
In
Dec2009Russia'sIRcoveredalmost20monthsof
im orts fourmonthsisconsideredade uate .
M2/Internationalreserves(%):Russia'sM2isfully
coveredbyitsinternationalreserves(excludinggold)
Source:CBRSource:CBR,Rosstat
HEEC
ONOMY
1Q05 1Q06 1Q07 1Q08 1Q09
0
5
10
15
20
25
30
2004 2005 2006 2007 2008 2009
1Q05 1Q06 1Q07 1Q08 1Q09
0%
30%
60%
90%
120%
150%
180%
2004 2005 2006 2007 2008 2009
1Q05 1Q06 1Q07 1Q08 1Q09
0
10
20
30
40
50
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Exports Imports
20
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M2/GDP
(%,
3M
ave.):
Russia's
monetisation
of
the
economyremainslowatjustabove30%(Dec2009).
YoYgrowthofM2andM0minusYoYGDPgrowth(%):
M2is
again
growing
slightly
faster
than
GDP,
an
indication
of excessliquidity
MonetaryaggregatesM2,M0,YoY(%):M2showed
positiveYoY
growth
in
Dec
2009
while
M0
is
still
declining.
15%
5%
5%
15%
25%
35%
45%
55%
65%
M2 M0
80%
60%
40%
20%
0%
20%
40%
60%M2 GDP M0 GDP
5%
10%
15%20%
25%
30%
35%
40%M2/GDPM2/GDP
T
Inflation(%
YoY):
CPI
fell
to
8%
YoY
in
January,
down
from8.8%inDec2009.Producerpriceinflationroseto
13.9%YoYinJan2010(upfrom4.7%inDec2009)
Source:CBR Source:CBR,Rosstat
Source:Rosstat,Bloomberg
Source:CBR,Rosstat
Source:CBR,Rosstat
PPIand
oil
price
(%
YoY):
The
recent
uptick
in
producerpriceinflationappearsrelatedtotheoil
pricerecovery
M2velocity
(GDP/M2):
M2
velocity
dipped
atad
lowerinDec2009.
Source:Rosstat
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 1Q97 1Q99 1Q01 1Q03 1Q05 1Q07 1Q09 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
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 '10
ConsumerPriceIndex ProducerPriceIndex
20%
10%
0%
10%
20%
30%
40%
60%
40%
20%
0%
20%
40%
60%
80%
100%
'04 '05 '06 '07 '08 '09 '10
Urals(lhs) PPI(rhs)
HEEC
ONOMY
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Loan/depositratio(%):Theaggregateloan/deposit
ratiofell
further
in
Nov
2009
to
101%.
Loans,depositsinroubles(%YoY):Depositsgrew
19.5%in
Nov
2009
while
the
slowdown
in
credit
growthhalted.
Loans,depositsindollars(%YoY):Indollarterms
thegrowth
in
deposits
was
less
pronounced
and
creditsarestilldeclining.
T
90%
100%
110%
120%
0%
10%
20%
30%
40%
50%
60%
TotalDeposits(YoY) TotalLoans(YoY)
10%
10%
30%
50%
70%
TotalDeposits(YoY) TotalLoans(YoY)
Source:CBR
Nominaldeposit
and
credit
rates
(%):
In
Nov
2009
banksloweredboththedepositrate(to8.8%)andthe
creditrate(to13.8%).
Realdeposit
and
credit
rates
(%):
On
the
back
of
lower
inflationthedepositrateismovingtowardspositive
territory.
Nonperforming
loans
(%/total
loans):
The
aggregateNPLratiocontinuestogrow,printing
6.4%inNov2009.
Source:CBRSource:CBR
Source:CBR,Rosstat Source:CBRSource:CBR
HEEC
ONOMY
2006 2007 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
Dec07 May08 Oct08 Mar09 Aug09
Dec07 May08 Oct08 Mar09 Aug09
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KEYINDICATORS 2003 2004 2005 2006 2007 2008 2009 2010E 2011E
NominalGDP(RUBbn) 13,243 17,048 21,625 26,904 33,112 41,668 39,212 47,300 57,224
GDP($bn) 432 592 764 989 1,294 1,677 1,235 1,624 2,077
GDPpercapita($) 2,984 4,116 5,342 6,943 9,109 11,808 8,736 11,527 14,794
RealGDPgrowth,(%) 7.3 7.1 6.4 7.4 8.1 5.6 7.9 6.4 7.1
Industrialoutputgrowth,(%) 8.9 8.0 5.1 6.3 6.4 2.6 10.8 5.0 5.6
Fixedinvestment (%) 12.1 14.6 10.0 15.6 22.9 13.2 17.0 5.2 9.4
Realretailsales(%) 8.8 12.1 12.8 13.9 16.0 14.0 5.5 9.2 8.2
SOCIALINDICATORS
Realdisposableincome (%) 15 11 12 13 12 3 2 9 9
Realwage(%) 10.3 11.2 9.9 13.4 16.2 11.0 2.8 7.3 9.1
Averagewage($/month) 180 237 302 396 531 694 592 776 1,001
Unemployment(%ILO) 8.6 8.2 7.6 7.2 6.1 6.4 8.4 7.9 7.3
PRICES
CPIgrowth
(%
Dec/Dec) 12.0 11.7 10.9 9.0 11.9 13.3 8.8 7.7 7.0
PPIgrowth(%Dec/Dec) 13.0 28.9 18.2 4.9 25.1 7.0 13.9 11.0 7.0
TRADE
Exports($bn) 135.9 183.2 243.8 303.6 354.4 471.6 306.0 382.1 398.0
Imports($bn) 76 97 125 164 223 292 192 233 298
Tradebalance($bn) 59.9 85.8 118.4 139.3 130.9 179.7 114.0 148.9 99.7
Currentaccount($bn) 35.4 58.6 84.6 94.7 77.0 102.3 49.9 89.3 59.8
Currentaccountratio(%/GDP) 8.2 9.9 11.1 9.6 5.9 6.1 4.0 5.5 2.9
Oilprice($/bbl,UralsMed,aop) 27 34 50 61 69 95 61 79 79
FEDERALBUDGET
Revenues(%/GDP) 20 20 24 23 23 22 19 19 18
Expenditures(%/GDP) 17.8 15.8 16.3 15.9 18.1 18.2 24.8 21.2 19.5
Fiscalbalance(%/GDP) 1.7 4.3 7.5 7.4 5.4 4.1 6.1 1.8 1.7
MONETARYINDICATORS
Grossinternationalreserves($bn) 77 125 182 304 479 427 439 502 544
M0(RUBbneop) 1,147 1,535 2,009 2,785 3,702 3,795 4,038 4,817 6,313
M0growth(%) 50.3 33.8 30.9 38.6 32.9 2.5 6.4 19.3 31.1
M2(RUBbneop) 3,213 4,363 6,046 8,996 13,272 13,493 15,698 18,526 23,381
M2growth(%) 50.5 35.8 38.6 48.8 47.5 1.7 16.3 18.0 26.2
M2/GDP(%average) 19.3 21.4 22.9 26.4 32.5 32.8 33.6 36.2 36.6
EXCHANGERATES
RUB/$(eop) 29.5 27.7 28.8 26.3 24.6 29.4 30.2 28.0 27.1
RUB/$(aop) 30.7 28.8 28.3 27.2 25.6 24.9 31.7 29.1 27.6
RUB/(eop) 36.8 37.8 34.2 34.7 35.9 41.4 43.4 42.0 39.6
R/(aop) 34.7 35.8 35.2 34.1 35.1 36.4 44.1 42.7 40.8
Realappr.(+)/depr.()RUB/$(%) 18.6 14.8 3.4 16.2 15.3 5.4 2.9 13.9 8.3
Realappr.(+)
/depr.(
)RUB/,
(%)
1.3 6.3 20.0 5.4 4.8
3.3 3.0 9.7 11.3
Source:Rosstat,CBR,MinistryofFinance,Bloomberg,Atonestimates
Macroeconomicforecast
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