investment outlook · slide 1 investment outlook 2q 2013 april 2013 equity and fi research team vtb...

Investment Outlook

2Q 2013

April 2013

Equity and FI Research Team

VTB Capital Investment Management

Investment Summary

Macro

Equities

Fixed-income

Appendix

Contacts

Content

Global economic cycle conditions have clearly improved over the previous 6 months. The Global PMI index has

entered an expansionary zone. Revised economic growth and inflation consensus forecasts took a turn for the better.

The G10 Economic Surprise Index has significantly improved.

Central bank quantitative easing (QE) efforts over the last 6 months have helped to generate positive

momentum for industrial production and inflation. Inflationary expectations continue to rise in the US as the Fed

continues its aggressive asset purchase program as of January 2013. The ECB's quantitative easing capacity may be

extended in 2013.

Global uncertainties keep investors ‘parked’ in defensive assets, which, in the current environment, are

guaranteed to slowly destruct wealth in real terms. US bond funds have accumulated roughly $1 trillion in

‘excessive’ investments, which were made at the expense of investments in risky assets (primarily equity). The ‘Great

Rotation’ theme is trending, however, it is still premature to call for a wholesale rotation from fixed income into equities.

We see a strong case for the Central Bank of Russia to ease monetary policy. From a monetary supply

standpoint, all the prerequisites for inflation deceleration are in place on a 12-16 month horizon. The Central Bank of

Russian has room to lower interest rates by 50-100 bps over the next 12 months. This may lead to a 25-95 bps

reduction in OFZ YTMs. Local high-grade corporate spreads to OFZs could contract 80-110 bps. Local high-yield

corporate bond spreads to OFZs could contract 170-220 bps.

We maintain a selective stance towards Russian Eurobonds. We prefer the high-yield corporate segment under a low inflationary scenario.

The scenario-weighted upside for the RTS index is +55% according to our estimates. Dividends and share buy-backs remain key forces that should unlock fundamental value. Following a strong rally on the fixed income side, risk appetite will likely spread to equities. Russian equities should more than double in order to close the accumulated 5 year performance gap with fixed income.

Investment Summary

■ Macro

Source: IMF, Bloomberg, JPMorgan, VTB Capital IM Research estimates

Global economic cycle

conditions have clearly

improved over the

previous 6 months.

The Global PMI index

has entered an

expansionary zone.

The revision momentum

of economic growth and

inflation consensus

forecasts took a turn for

the better.

The G10 Economic

Surprise Index has

significantly improved.

The Global Economic Cycle Has Improved

45

47

49

51

53

55

57

59

Manufacturing PMI is back in an expansionary mode

Increase in industrial activity

Decline in industrial activity

-10

-5

0

5

10

15

Re

al G

DP

gro

wth

, % c

h. y

oy

2013 expected GDP growth versus normalized levels

Bloomberg consensus GDP growth, 2013 Normalized GDP growth

-1,00

-0,80

-0,60

-0,40

-0,20

0,00

0,20

0,40

0,60

0,80

Jul

09

Oct

09

Jan

10

Ap

r 10

Jul

10

Oc

t 10

Jan

11

Ap

r 11

Jul

11

Oc

t 11

Jan

12

Apr

12

Jul

12

Oc

t 12

Jan

13

Real GDP consensus (3 months revision momentum), pp

Inflation consensus (3 months revision momentum), pp

Consensus GDP growth and Inflation estimate revision momentum is no longer negative

-75,0

-37,5

0,0

37,5

75,0

Jun

09

Oc

t 0

9

Feb

10

Jun

10

Oc

t 10

Feb

11

Jun

11

Oc

t 11

Feb

12

Jun

12

Oc

t 12

Feb

13

Economic Surprise Index, G-10 countries

Economic surprise index has significantly improved

* The average for the group of countries: US, UK, Japan, Canada, the EU, Norway, Sweden, Switzerland, from 2008 to 2011.

Source: BIS, Bloomberg, VTB Capital IM Research estimates

Central bank QE efforts

over the last 6 months

have helped generate

positive momentum for

industrial production and

inflation.

Inflationary expectations

continue to rise in the US,

as the Fed maintains its

aggressive asset purchase

program as of January

2013. The ECB's

quantitative easing

capacity may be extended

in 2013.

The BoJ recently

announced

unconventional stimulus

measures with a target to

double monetary base and

to engineer an inflation of

2% per year.

Quantitative Easing – The Initial Results

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

0 6 12 18 24 30 36

PM

I in

de

x ch

an

ge

, p

p

Ind

ust

ria

l P

rod

uct

ion

In

de

x ch

an

ge

, p

p

Months

Industrial production response to QE*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-0.01

0.00

0.01

0.02

0.03

0.04

0.05

0 6 12 18 24 30 36

PM

I Pri

ce I

nd

ex

cha

ng

e,

pp

Pri

ce In

de

x ch

an

ge

, p

p

Months

Consumer price index response to QE *

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Jan

07

Ap

r 0

7Ju

l 0

7O

ct

07

Jan

08

Ap

r 0

8Ju

l 0

8O

ct

08

Jan

09

Ap

r 0

9Ju

l 0

9O

ct

09

Jan

10

Ap

r 1

0Ju

l 10

Oc

t 10

Jan

11

Ap

r 1

1Ju

l 11

Oc

t 11

Jan

12

Ap

r 1

2Ju

l 12

Oc

t 12

Jan

13

US

D b

n

Central bank balance sheets - extraordinary monetary policy measures carry on

Bank of England US Federal Reserve ECB

-2.0

-1.0

0.0

1.0

2.0

3.0

Jun

05

De

c 0

5

Jun

06

De

c 0

6

Jun

07

De

c 0

7

Jun

08

De

c 0

8

Jun

09

De

c 0

9

Jun

10

De

c 10

Jun

11

De

c 11

Jun

12

De

c 12

US Inflation expectations rose after QE announcement

Inflation Expectations QE Announcements

QE1

QE1Expansion

QE2

QE3?

The Russian economy has

been cooling down over the

last few months based on

key macro indicators.

The restrictive monetary

policy pursued by the

Central Bank of Russia,

fiscal tightening, fragile

external demand and flat oil

prices – are the main

reasons why we see this

negative trend.

We have downgraded our

forecasts for all scenarios

in 2013.

* Scenarios presented dependent on the global economic cycle

Source: Russian Federal State Statistics Service, Central Bank of Russia, Ministry of Finance, VTB Capital IM Research estimates

Russian Economics – New Challenges Ahead

Indicators Average

change, pp Comments

Supply indicators -0.7 Real GDP, industrial output and fixed capital investments have significantly cooled over the

last 3-5 months

Demand indicators -0.1 Retail sales are slowing, but real wage growth is still strong, which puts pressure on

corporate profit margins due to limited productivity gains

CPI -0.1 CPI peaked last February, but it is still above the CBR target range (5-6%). Slowing

monetary supply growth will help to bring down CPI in the following 12-16 months

Federal Budget

Balance 0.8

Budget policy is becoming more tight, budget deficit is under control, gradual adoption of the

“budget rule” (use of LT average oil prices in budget planning)

Money supply

(М2 aggregate) 0.1

M2 growth has decelerated in 2012 to 10-13% YoY, cheaper money would be helpful for the

economy

Changes in our forecasts, weighted probability scenario

Indicators 2012Recessionary

Scenario

Low Inflationary

Scenario

Inflationary Upturn

Scenario Real GDP, % 3.4% 1.7% 2.7% 3.0%Industrial Output, % 2.6% 1.2% 2.6% 3.1%Fixed Asset Investments, % 6.7% 2.3% 3.9% 4.5%Real Retail Sales, % 5.9% 3.1% 5.7% 5.9%Real Wages per capital, % 7.8% 4.4% 6.0% 6.4%CPI, % average per year 5.1% 5.8% 6.0% 7.0%CPI, % December YoY 6.6% 5.3% 5.9% 8.2%Trade Balance, $ bln 193.8 130.0 165.6 174.5Federal Budget Revenues, $ bln 12 854 10 605 12 940 13 385General Budget Deficit(-)/Surplus(+), % -0.2% -4.2% -0.7% 0.0%Money Supply (M2) 11.9% 10.2% 17.5% 21.9%Gross International Reserves (GIR), $ bln 537.6 440.9 524.7 533.1RUB/USD Exchange Rate, eop 30.4 33.2 30.3 29.5RUB/EUR Exchange Rate, eop 40.2 39.9 36.3 35.4CBR Dual-Currency Basket ($55/€45) 34.8 36.2 33.0 32.2Urals Crude Oil, average, $/bbl 110.6 85.0 109.0 115.0Scenario Probability 20% 30% 50%

Russian Econom y – 2013 Forecast

We see a strong case for

the Central Bank of Russia

to ease monetary policy.

We see several reasons for

this.

From a monetary supply

standpoint, all the

prerequisites for inflation

deceleration are in place

on a 12-16 month horizon.

Secondly, based on

previous experience, it is

natural for the newly

appointed CBR chairman

to lower rates.

Thirdly, economic

slowdown creates political

pressure on the CBR to

target both inflation and

GDP growth.

All in all, we estimate that

the CBR has room to cut

key policy rates by 50-100

bps this year.

Central Bank of Russia – On The Way to Policy Easing

Chairman Term Name of the Chairman

Months in office

Interest rate change (bps) during

Interest rates, %

First 6 months since appointment, bps

At the end of term, bps

At the beginning of term

6 months after appointment

At the end of term

Jun’13- Nabbiullina E.S.** 7%

Mar’02-Apr’13 Ignatiev S.M. 133 -5 -12 19% 14% 7%

Sep’98-Mar’02 Geraschenko V.V. 42 -60 -81 100% 40% 19%

Nov’95-Sep’98 Dubinin S.K. 34 -26 -2 101% 75% 100%

Oct’94-Nov’95 Paramonova Т.V. 13 -65 -110 211% 147% 101%

Jul’92-Oct’94 Geraschenko V.V. 27 n/a n/a n/a n/a n/a

* Average of key interest rates, including CBR refinancing rate, Moscow interbank rate and average “Mosprime” rate for all

terms

** Appointment for the CBR Chairman role is expected in June’2013

CBR leadership changes and interest rates*

-112

-76

-75

-47

-26

33

-150 -100 -50 0 50

EM, Latam

EM total

EM, CEEMEA

EM, Asia

DM total

Russia

Money market rate changes during the last 12 months, bps

Source: CBR, Bloomberg, VTB Capital IM Research estimates

-20%

0%

20%

40%

60%

80%

97

98

99

00 01

02

03

04

05

06

07

08

09 10 11 12 13

M2 growth, % yoy M0 growth, % yoy

Monetary aggregates growth is cooling down after the CBR's Inflation Targeting

CBR easing could be

positive for both equities

and local fixed income.

Expected interest rates cuts

by CBR between 25 and 100

bps could bring down OFZ

YTM by 25-95 bps.

High-grade corporate bond

spreads to OFZs could

tighten by 80-110 bps

depending on duration.

Also high-yield corporate

spreads to OFZs could

tighten by 170-220 bps

depending on duration.

CBR Easing – What If Scenarios

Interest rates*, % Interest rates change*, bps

Micex Equity Index, 2013 eop

Micex Equity Index, Mid’14 eop

Micex Equity Index, % ch. 2013 eop

Micex Equity Index, % ch. Mid’14 eop

Current Value 6.8% 0 1 437 1 437 1 437 0%

Expected

values

6.6% -25 1 525 1 691 6% 18%

6.3% -50 1 624 1 713 13% 19%

6.1% -75 1 646 1 736 15% 21%

5.8% -100 1 669 1 758 16% 22%

CBR easing impact on the Russian stock market based on previous easing episodes

* Average of money market rates, including CBR refinancing rate, Moscow interbank rate and average “Mosprime” rate for all

terms

Expected bond total returns based on previous easing episodes

Interest rates change**, bps

OFZ HG Corporate Bonds HY Corporate Bonds

Duration, years Duration, years Duration, years

2 3 7 2 3 2 3

Current YTM 0 6.0% 6.2% 6.7% 7.8% 8.2% 12.0% 12.3%

Expected Total

Returns

-25 7.2% 7.5% 8.9% 9.7% 10.9% 11.8% 14.1%

-50 7.5% 7.9% 10.1% 9.9% 11.5% 12.2% 14.9%

-75 7.7% 8.4% 11.3% 10.2% 12.0% 12.6% 15.6%

-100 7.9% 8.8% 12.5% 10.5% 12.6% 13.0% 16.4%

** “Mosprime” rate for 3 months

Source: CBR, Micex, Bloomberg, VTB Capital IM Research estimates

■ Equities

Global uncertainty has

forced investors to hoard

defensive assets. In the

current environment, most of

these assets may spell a

slow and certain wealth

destruction process in real

terms.

The strongly suppressed

appetite for risk assets

(especially, equities) appears

to have lead US fixed-income

funds to accumulate around

$1 trillion in excess

investments.

It is a matter of time until a

correction will occur,

reversing flows from fixed

income into equities.

Too Much Money Parked in Defensive Assets

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Ass

ets

, U

SD

bn

Money market funds Savings accounts

In the US alone $9tn are accumulated in money market funds and savings accounts...

0

1

2

3

4

5

6

7

8

9

10

1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Yiel

d.%

1Y UST YTM

...despite the fact that it is earning almost nothing

Source: Bloomberg, ICI, FRB, VTB Capital IM Research estimates

0

500

1,000

1,500

2,000

2,500

3,000

198

319

84

198

519

86

198

719

88

198

919

90

199

119

92

199

319

94

199

519

96

199

719

98

199

92

00

02

00

12

00

22

00

32

00

42

00

52

00

62

00

72

00

82

00

92

010

20

112

012

Equity fund inflows are far below the long-term trend...

Cumulative equity mutual fund net inflows, $bn Trend

$ 1tn below long-term trend

0

400

800

1,200

1,600

2,000

198

319

84

198

519

86

198

719

88

198

919

90

199

119

92

199

319

94

199

519

96

199

719

98

199

92

00

02

00

12

00

22

00

32

00

42

00

52

00

62

00

72

00

82

00

92

010

20

112

012

...while bond funds enjoy hefty subscriptions

Cumulative bond mutual fund net inflows, $bn Trend

$1 tn above long-term trend

40,000

-20,000

0

20,000

40,000

$ m

n

Monthly net flows for US Equity mutual funds since the beginning of 2011

-40,000

-20,000

0

20,000

40,000

$m

n

Monthly net flows for US Bond mutual funds since the beginning of 2011

0

20

40

60

80

100

120

Number of Google Search Quairies for "The Great Rotation" topic

Interest over time. The number 100 represents the peak search interest

Source: Google Trends, ICI, VTB Capital IM Research estimates

Google search query

statistics show that the

term ‘Great Rotation’ has

rapidly grown more

popular since December

2012.

US Equity fund inflows

moved firmly into positive

territory since the

beginning of 2013, while

bond fund inflows have

lost some momentum.

Nevertheless, it is still

premature to call for a

wholesale rotation from

fixed income into equities

based on recent

developments.

The Great Rotation – Reality or Myth ?

-400,000

0

400,000

800,000

1,200,000

1,600,000

2,000,000

$ m

n

Cumulative bond fund inflows less equity fund inflows since 2007

Russian Equities – Lagged Fixed Income for Too Long

The last 5 years proved to be exceptionally favorable for fixed income investors and vastly disappointing for equity investors.

Equities should double in order to compensate for the gap in relative performance, assuming that bond yields remain flat.

Public companies continue to perform equity buybacks and for the first time in many years the balance of cash distributions in favor of minority shareholders and equity issuance becomes significantly positive.

Russia's fixed income market capitalization is now 2x larger than the equity market free float. Should investor preferences reverse at some point in the future, too much money will begin chasing too few assets.

-19

-29

3

-7-2

-6

73 3 4

2 3 4 6

14 4

04 2

10

-22.4

-36

-5.4-8.6 -8.8

-11.6-9

-40

-30

-20

-10

0

10

20

2006 2007 2008 2009 2010 2011 2012

$ b

n

Balance Dividends Share buybacks Equity placements

For the first time in many years the balance of cash distributions are in favour of minority shareholders and equity issuance becomes meaningfully positive

0

50

100

150

200

250

300

350

99 00 01 02 03 04 05 06 07 08 09 10 11 12

Re

lati

ve p

erf

orm

an

ce i

nd

ex

Russian equities total return relative to bonds total return starting from 1999

MSCI Russia Total Return / EMBI+ Russia Total ReturnNormalized trend (7% p. a.)

0%

50%

100%

150%

200%

250%

300%

350%

99 00 01 02 03 04 05 06 07 08 09 10 11 12

De

via

tio

n f

rom

tre

nd

, %

% Deviation from normalized trend

Source: Bloomberg, VTB Capital IM Research estimates

274

325

88

187223

203 217180

237 246

288

345 358

435

0

50

100

150

200

250

300

350

400

450

500

2006 2007 2008 2009 2010 2011 2012

$ b

n

Russia's Fixed Income Mkt Cap Is Now 2x Larger Than Equity Market Freefloat

RTS freefloat Mkt Cap, $ bn Fixed income Mkt Cap, $ bn

Russian Stocks: A Top-Down View


Long-term stock market

performance is mainly

determined by the corporate

profit growth, while P/E

multiple re-pricing is

responsible for short-term

volatility.

The downward EPS revision

cycle for Russian stocks is

almost over and the possibility

for positive surprises begin to

outweigh the risk of further

disappointments.

In a low interest rate

environment, even under the

assumption of zero long-term

growth, a fair P/E multiple

should be in the range of 8x-

12x.

According to our estimates the

probability-weighted upside

for the RTS index is 61%.

RTS Index Top-Down Scenarios (Next 12 months)

Recessionary

Scenario

Low Inflation

Scenario

Inflationary Upturn

Scenario

EPS 2012E, $ 260.0 260.0 260.0 % change 2012 vs 2011 -20% 1% 19%EPS 2013E, $ 208.0 263.9 309.4Russian Sovereign Risk, % 4.0% 3.5% 5.0%Russian ERP, % 20.0% 9.0% 11.0%Terminal earnings growth, % 3.0% 3.0% 3.0%Current RTS Index Value 1420 1420 1420Target P/E multiple 4.8 10.5 7.7RTS Index Fair Value 990 2772 2383Upside/Downside, % -30.3% 95.3% 67.9%Dividend Yield, % 3.7% 4.6% 5.4%Total Return, % -26.6% 99.9% 73.3%Probability-weighted return, % 61.3%

Estimated probability, % 20% 30% 50%

50

110

170

230

290

350

2008 2009 2010 2011 2012 2013

2006-2010 Forward 12 months Low Inflation Scenario

Inflationary Upturn Scenario Recessionary Scenario

Long-term EPS trend

RTS Index EPS Scenarios

0

3

6

9

12

15

18

08 09 10 11 12 13



RTS Index Target P/E Scenarios

Russia 2011

Russia 2006

Russia 2015F

0%

10%

20%

30%

40%

50%

60%

70%

80%

12% 17% 22% 27% 32%

Div

ide

nd

Pa

you

t, %

ROE, %

As ROE declines, increasing dividend payout is a natural development

Dividends Should Help to Unlock Fundamental Upside

Compared to other emerging

markets, Russia has the

lowest dividend payout ratio.

In the past, Russian

companies generated high

returns on equity, justifying

the reinvestment of income.

As ROEs decline, a rise in

dividend payouts is a natural

development.

The dividend yield for the

RTS index could reach 4.5%

in 2012, with a payout ratio

of 20-25%. Over the next 3-5

years, Russian companies

are likely to raise dividend

payout ratios to 35-50%.

18% 18% 19% 20%

26% 33% 34%

40% 40%

43% 47% 47% 47%

50% 50% 52%

60% 71%

0% 20% 40% 60% 80%

Russia China

S. Korea Mexico

Peru India

Poland Chile

Indonesia Argentina

Egypt Philippines

Brazil Malaysia Thailand S. Africa

Taiwan Columbia

Russia has the lowest dividend payout ratio (% net income) among emerging markets

25%

18% 17%

21%

12%

18%

13%

0%

5%

10%

15%

20%

25%

30%

2012F 2011 2010 2009 2008 2007 2006

Div

ide

nd

Pa

you

t, %

of

ne

t in

com

e

Long-term trend of increasing dividend payouts, with plenty of room to continue

0%

1%

2%

3%

4%

5%

6%

7%

2007 2008 2009 2010 2011 2012

Div

ide

nd

Yie

ld,

%

Russia now offers a dividend yield premium to emerging markets

Russia Emerging Markets (MSCI EM)

Source: Bloomberg, RTS-MICEX, VTB Capital IM Research estimates

50

110

170

230

290

350

2008 2009 2010 2011 2012 2013



Long-term EPS trend

RTS Index EPS Scenarios

EPS Scenarios for 2013

Our 2013 EPS

expectations for the RTS

index are quite restrained

due to the fact that the

most heavily weighted

sectors in the index (oil

and gas, banks) have

limited long-term growth

potential from the current

base.

According to our

estimates, the aggregate

ROE for the RTS Index in

2013 will be: 15.7% in the

inflationary scenario

(which barely brings

earnings to their long-

term trend), 13.4% in the

low inflationary scenario,

and 10.6% in the

recessionary scenario.

The street consensus

calls for 13.3% ROE in

2013.

-+2%

+19%

-20%


12.7%11.8%

12.9%13.7%

22.2%

16.9%

12.6%10.9%

8.4%

19.1%

14.7%13.3% 13.4%

10.6%

15.7%

0%

5%

10%

15%

20%

25%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 2013F

RO

E

Reported 2002-2012(F) Consensus Forecast

Low Inflation Scenario Recessionary Scenario

Inflationary Upturn Scenario

RTS Index ROE

7.0

1.9

1.5

1.0

1.0

0.7

0.6

0.2

0.1

-4.0 -2.0 0.0 2.0 4.0 6.0 8.0

RTS Index total

Oil

Gas

Telecoms

Banking

Electric Utilities

Metals & Mining

Consumer Cyclicals

Others

Sector contribution to RTS Index EPS change in 2013 vs 2012 (probability-weighted for 3 scenarios), percentage points

-75.6%

-45.8%

-40.5%

-20.0%

-18.0%

-14.4%

-14.0%

1.8%

8.3%

8.8%

43.7%

-100% -50% 0% 50% 100%

Steel

Base Metals

Discos

Gencos

Fertilizers

Mobiles

Gazprom

Fixed-Line Telcos

Oil&Gas

Banking

Retail

Consensus EPS Revisions 2011-2012 (peak to trough), %

0%

8%

15%

23%

30%

38%

2004 2005 2006 2007 2008 2009 2010 2011 2012

Russian Equity Risk Premium (E/P-BY+g), %

At What P/E Should Russian Stocks Trade?

A low inflationary recovery

scenario assumes that the

P/E for the Russian market

will rerate to 10.5x, which is

close to the upper band of the

historical range.

The inflationary scenario

assumes a target P/E value of

7.7x due to higher interest

rates and risk premiums.

A recessionary scenario

assumes a P/E of 4.8x.

We expect Russia’s P/E

discount to emerging markets

to narrow from the current

60% to 20-25%, which is

justified given the sector

structure of the Russian

market.

Recessionary Scenario = 20%

Low Inflationary Scenario= 9%

Inflationary Scenario = 11%

Sector-neutral P/E calculations for RTS Index

Weight in

RTSI

Weight in

MSCI EM

P/E of

companie

s from

RTSI

P/E of

companies

from MSCI

EM

Discount

to EM

countrie

s

Oil & Gas 54,4% 12,1% 5,1 6,9 -26%

Metals and Fertilizers 13,9% 11,1% 11,5 11,6 -1%

Telecommunication 4,5% 7,5% 9,4 12,0 -21%

Consumer Sector 1,9% 8,9% 18,6 21,4 -13%

Financials 18,5% 27,1% 5,0 9,6 -48%

Electric Utilities 6,0% 3,5% 7,7 11,5 -33%

Others 0,9% 29,8% 6,0 11,0 -45%

Total 100,0% 100,0% 6,6 11,2 -41%

Total factoring in MSCI EM 7,7 11,2 -32%


0

3

6

9

12

15

18

08 09 10 11 12 13



RTS Index Target P/E Scenarios

-70,0%

-60,0%

-50,0%

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

2005 2006 2007 2008 2009 2010 2011 2012 2013

P/E 12m FWD Premium (+) / Discount (-) : MSCI Russia vs MSCI EM,

Premium (+) / Discount (-) MSCI Russia vs MSCI EM

Average Discount (2005−11)

Dividend Stories – The Easy Money Has Already Been Made

From the beginning of 2010,

dividend stories

outperformed the broad

market by a wide margin.

They are also likely to

outperform during

sideways markets.

The difference in P/E ratios

for dividend stories and the

broad market is now near

historical lows, which may

point to a market reversal

as it was in the late 2008.

Dividend Stories in the Sample

Lukoil

MTS

Tatneft preferred

Surgutneftegaz preferred

Bashneft preferred

Gazpromneft


0

2

4

6

8

10

12

14

2006 2007 2008 2009 2010 2011 2012

P/E

Ra

tio

Dividend Stories MSCI Russia Index

Dividend stories no longer command a sizable discount to the broad market...

-80%

-30%

20%

70%

120%

170%

220%

2006 2007 2008 2009 2010 2011 2012 2013

Pe

rfo

rma

nce

Ind

ex

Dividend stories MSCI Russia Index

Total return performance ddddddd(including dividend reinvestment), %

0

1

2

3

4

5

6

7

8

9

10

-80%

-60%

-40%

-20%

0%

20%

40%

60%

2006 2007 2008 2009 2010 2011 2012 2013

P/E

dif

fere

nce

Per

form

ance

Ind

ex

P/E difference (rhs) MSCI Russia Index

...which may be an indication of marketreversal

0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140

P/E

Ratio

Rel

ati

ve P

erfo

rm

an

ce

Ind

ex

Small-Caps outperform the broad market during P/E expansion with a short lag

Small-caps relative to the market MSCI Russia P/E (rhs)

Equities – Time to Revisit the Small-Cap Theme

The small-cap performance cycle can be described as follows:

1) Recovery / bull market. P/E multiples expand. Small caps outperform.

2) Mature bull market. P/E multiples flatten / start to contract. EPS expectations become stretched.

Small-cap performance flattens / reverses.

3) Bear market. P/E multiples contract. Small caps suffer badly from sell-off.

2 3 1 2 3 1 ? 2 3 1 2 3 1 ?

200

400

600

800

1000

1200

1400

1600

1800

0

20

40

60

80

100

120

140

Rel

ati

ve P

erfo

rm

an

ce

Ind

ex

Small-Caps relative to the market

Small-caps relative to the market MSCI Russia Index (rhs)


■ Fixed Income

We expect that the 12m

total return for sovereign

ruble bonds to be 7.9% in

USD.

Corporate bonds could

return 9.1% in USD during

the next 12 months.

Corporate credit spreads

were generally flat in

1Q13 and still have room

for narrowing.

CBR easing could trigger

domestic and foreign

demand for ruble bonds

as a whole.

Ruble Bonds

Source: Central Bank of Russia, Rosstat, Cbonds, Bloomberg, VTB Capital IM Research estimates

0

100

200

300

400Corporate Ruble bonds Z-SPREAD, basis points

Corporate Ruble Bonds

4

6

8

10

12

Russian debt YTMs, %

OFZ Corporate Ruble Bonds

5

5,5

6

6,5

7

7,5

8

8,5

9

0 1 2 3 4 5 6 7 8 9 10 11 12

Yie

ld to

Ma

turi

ty,%

Duration, Years

OFZ Yield Curve

First-tier Ruble denominated government and corporate bonds

Corporate Yield Curve

R uble BondsC urrent

Value

R ecessionary

Scenario

L ow

Inflationary

Scenario

Inflationary

Upturn

Scenario

C orporate Bonds, spreads to

OF Z, bps241 365 1 80 262

W eighted Average Duration, years

OF Z 4.0 4.0 4.0 4.0

C orporate Bonds 2.0 2.0 2.0 2.0

E xpected Y ield-to-Maturity R UB terms, %

OF Z 6.9% 8.2% 6.6% 7.4%

C orporate Bonds 8.3% 1 1 .8% 8.4% 1 0.0%

E xpected T otal R eturn USD terms, % per annum

E xpected R UB/USD appreciation

(+) / depreciation (-), %-6.8% 2.4% 5.0%

OF Zs -3.2% 1 0.6% 1 0.8%

C orporate Bonds -1 .3% 1 1 .1 % 1 2.1 %

W eighted average of 3 scenarios (USD)

OF Z 7.9%

C orporate Bonds 9.1 %

Scenario probability, % 20% 30% 50%

10-year OFZ yields adjusted for CPI and FX expectations do not look very attractive compared to other EMs Based on comparison with other EMs, Russian long-term ruble rates look fair.

EM Interest Rates adjusted for Inflation & FX Expectations

Long Term Ruble Interest Rates Look Fair Based on EM Comparison

-600

-400

-200

0

200

400

600

800

1000

EM Historical Spreads 10YR-CPI, b.p. (2005 – present, ex 2H 2008 – 2009)

last average

Russia

Turkey Indonesia

Poland

South Africa

South Korea

Mexico Hungary Czech Republic

Chile

Philippines

Brazil

0

2

4

6

8

10

12

0 2 4 6 8 10 12

CP

I, %

10 Year OFZ Yields, %

Long Term Interest Rates vs CPI

Nom. Interest

Rate, % Current CPI, %

Real Rate, bp, (1)-(2)

Ex CPI 4Q Ahead

Anticipated 1Y change in inflation, bp

Current FX Rate

Expected FX Depreciation

(+), bp

Real Interest Rate adj. on FX & Infl.Expectations,

bp, (3)-(5)-(8)

Current CDS, bp

1 2 3 4 5 6 8 9 10 Россия 6.9 7.3 -40 30.2 Recession Scenario 5.3 -200 986 -826 150 Low Inflation Scenario 5.9 -140 27 74 150 Inflation Upturn Scenario 8.2 90 -238 109 150 Turkey 6.9 7.03 -10 6 -103 1.8 10 83 138 Indonesia 5.8 5.3 49 5.7 39 9678 -3 13 139 Poland 4.0 1.3 273 2.3 100 3.1 241 -68 91 South Africa 7.2 5.9 129 5.6 -35 8.9 -88 251 173 South Korea 3.1 1.4 172 2.6 120 1086.3 -381 432 68 Mexico 5.3 3.6 173 3.4 -19 12.7 -561 753 94 Hungary 6.4 2.8 362 3.7 90 219.5 843 -571 344 Czech 2.4 1.7 68 1.6 -10 19.1 223 -145 57 Chile 5.7 1.3 436 2.7 140 472.4 161 135 65 Philippines 3.8 3.4 40 4 60 40.7 -301 281 100 Brazil 9.8 6.31 353 5.3 -101 2.0 30 424 131 EM, Ex Russia 144 127


Credit Spreads – Betting On Corporate “Long End” With

Reasonable Credit Quality

High-yield corporate spreads with 1-2 year duration look attractive and are trading ~600bps above OFZ rates.

High-grade corporate spreads on the long end have been widening during 2012 ─ 1Q 2013 from 80bps to 205bps. The latter together with expected CBR interest rate cuts make the rationale for our second favorite bet.

Financial sector spreads look less attractive when weighed against potential risks. We believe that the economic slowdown and resulting pressure on loan portfolio quality are not yet priced in.

0

100

200

300

400

500

600

700

800

Corporate Credit Spreads

Corps - HG 1Y Corps - HG 2Y Corps - HG 3Y

Corps - 2nd Tier 1Y Corps - 2nd Tier 2Y Corps - 2nd Tier 3Y

Corps - HY 1Y Corps - HY 2Y Corps - HY 3Y

0

100

200

300

400

500

600

700

800

Financial Credit Spreads

Fins - HG 1Y Fins - HG 2Y Fins - HG 3Y

Fins - 2nd Tier 1Y Fins - 2nd Tier 2Y Fins - HY 1Y

Fins - HY 2Y

0

100

200

300

400

500

600

700

800

Corporate Credit Spreads (less than 1 year)

Corps - 2nd Tier 6M Corps - HY 6M

0

100

200

300

400

500

600

700

800

Financial Credit Spreads (less than 1 year)

Fins - HG 6M Fins - 2nd Tier 6M Fins - HY 6M

Source: Bloomberg, Moscow Exchange, VTB Capital IM Research estimates

Russian Eurobonds

came under pressure in

the 1Q13, especially in

the sovereign and

investment grade

corporate segments.

We maintain a selective

stance towards Russian

Eurobonds. We prefer

the high-yield corporate

segment under a low

inflationary scenario.

However, should the

global economic cycle

decline ─ sovereign and

investment grade

corporate Eurobonds

could outperform ruble

bonds in USD terms.

Russian Eurobonds

0

200

400

600

800

1000Russian Eurobonds OAS spreads, bps

Sovereign Eurobonds

High Grade Corporate Eurobonds

High Yield Corporate Eurobonds

0

2

4

6

8

10

12Russian Eurobond YTMs, %

Sovereign Eurobonds

High Grade Corporate Eurobonds

High Yield Corporate Eurobonds

0

1

2

3

4

5

6

0 2 4 6 8 10 12 14 16 18

Yie

ld t

o M

atu

rity

, %

Duration, years

Russian Eurobonds - sovereign and corporate issues above "BBB-"

Sovereign Eurobond Curve

Corporate Eurobond Curve

Source: Bloomberg, Merrill Lynch, VTB Capital IM Research estimates

R uble BondsC urrent

Value

R ecessionary

Scenario

L ow

Inflationary

Scenario

Inflationary

Upturn

Scenario

C orporate Bonds, spreads to

OF Z, bps241 365 1 80 262

W eighted Average Duration, years

OF Z 4.0 4.0 4.0 4.0

C orporate Bonds 2.0 2.0 2.0 2.0

E xpected Y ield-to-Maturity R UB terms, %

OF Z 6.9% 8.2% 6.6% 7.4%

C orporate Bonds 8.3% 1 1 .8% 8.4% 1 0.0%

E xpected T otal R eturn USD terms, % per annum

E xpected R UB/USD appreciation

(+) / depreciation (-), %-6.8% 2.4% 5.0%

OF Zs -3.2% 1 0.6% 1 0.8%

C orporate Bonds -1 .3% 1 1 .1 % 1 2.1 %

W eighted average of 3 scenarios (USD)

OF Z 7.9%

C orporate Bonds 9.1 %

Scenario probability, % 20% 30% 50%

■ Appendix

Economic cycle Cycle description Scenario

probability Reasoning

Recessionary

The scenario is accompanied by a decline in economic activity. Real GDP growth is significantly below potential GDP growth. Inflation could be at zero or negative. Financial assets are under stress, company valuations could be below fair value.

30%

The 2013 consensus forecasts* for GDP growth and inflation have begun gaining positive momentum. A recessionary scenario has already materialized in the Euro area. A slowdown has occurred in the Chinese economy.

Inflationary Upturn

This scenario is accompanied by an increase in economic activity. Real GDP growth and inflation peaks.

60%

Central banks continue their expansionary and unconventional monetary policies. These measures increase the probability of an inflationary upturn scenario. Thus it could mitigate the debt situation and fiscal deficits of developed countries over the long term.

Low Inflationary

The most favorable cycle for risky assets. This scenario is accompanied by low inflation and expanding economic activity. Real GDP growth accelerates while inflation is low and stable.

10% Central banks continue their expansionary unconventional monetary policies while inflationary forces remain well anchored.

Sources Bloomberg, VTB Capital IM Research estimates

* Bloomberg consensus forecast

2013 Macro Scenarios

Equities: Sector Preferences


We see Financials, Utilities and Consumer Staples (with the exception of Retail) as potential outperformers.

The outperformance of the oil & gas sector since the beginning of 2011 has made it considerably less attractive. The sector’s relative value no longer warrants an overweight stance.

Metals & mining and mobile telecoms look less attractive considering their risk-reward tradeoff.

Sector selection scorecard

Sector-

Specific

Risks

Sector-Specific

Catalysts

Sector Value Score Value Score Score Score Value Score Value Score

Oil&Gas 11,2% 0 -43% 2 0 0 0% 0 84% 1 0,45

Metals&Mining 22,3% 1 29% -1 0 0 6% 0 49% 2 0,55

Mobile Telecoms 23,9% 1 -35% 2 -1 0 8% 0 123% -1 0,48

Fixed-line

Telecoms14,1% 1 -3% 0 0 0 -9% -1 75% 2 0,55

Financials 49,6% 2 -51% 2 -1 0 3% 0 65% 2 1,33

Consumer 21,6% 1 4% 0 0 1 18% 1 96% 0 0,63

Electric Gencos 61,6% 2 -42% 2 -1 0 -7% -1 40% 2 1,18

Electric Discos 50,3% 2 -41% 2 -2 0 -13% -1 31% 2 1,10

Weight 7,5% 7,5% 100%40% 15% 15% 15%

DCF Upside, %

P/E (1Y Fwd)

Discount/Premiu

m to International

Peers

Earnings Revision

Momentum (last

3m)

Current P/BV

Valuation as % of

5Y AverageTotal Score

0,5

0,5

0,5

0,6

0,6

1,1

1,2

1,3

0 0,4 0,8 1,2 1,6

Metals&Mining

Fixed-line Telecoms

Mobile Telecoms

Oil&Gas

Consumer

Electric Discos

Electric Gencos

Financials

Sector Aggregate Score

11.2%

14.1%

21.6%

22.3%

23.9%

49.6%

50.3%

61.6%

0.0% 40.0% 80.0%

Oil&Gas

Fixed-line Telecoms

Consumer

Metals&Mining

Mobile Telecoms

Financials

Electric Discos

Electric Gencos

DCF Upside by Sector, %

Banks and Utilities look

attractive based on a

combination of relative

valuation measures.

Retail and Mobile

Telecom valuations look

stretched.

* - P/E multiple is used for banks instead of EV/EBITDA. Last 5Y average valuations of EM Utilities were used as a benchmark due to

lack of adequate data for Russian Utilities

Sector Relative Valuations


Metals&Mining

Oil&Gas

Mobile Telecoms

Fixed-line TelecomsElectricity Gencos

Electricity Discos

Banking

Consumer Staples

Retail

Transportation

Fertilizers

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

20,0

-5% 5% 15% 25% 35% 45%

P/E

20

13E

EPS CAGR 12-15E

P/E Multiples versus expected growth

Attractive

Expensive

118%

113.4%

94%

90%

87%

84%

67%

55%

42%

33%

26%

0% 20% 40% 60% 80% 100% 120% 140%

Metals&Mining

Mobile Telcos

Retail

Fertilizers

Transportation

Fixed-line Telcom

Oil&Gas

Electric Gencos

Consumer discretionary

Banking

Electric Grids

EV/EBITDA 2013E as % of Last 5Y Average*

Oil&Gas

Mobile Telecoms

Fixed-line Telecoms

Electricity GenerationElectricity Distribution

Banking

Consumer staples

Retail

Transportation

Fertilizer

0,0

1,0

2,0

3,0

4,0

5,0

6,0

5% 15% 25% 35% 45% 55%

P/B

V M

ult

iple

ROE 2013E, %

P/BV vs ROE

Attractive

Expensive

123%

110%

84%

81%

75%

66%

65%

61%

49%

49%

31%

0% 20% 40% 60% 80% 100% 120% 140%

Mobile Telcos

Retail

Oil&Gas


Fixed-line Telcom

Fertilizers

Banking

Transportation

Metals&Mining

Electric Gencos

Electric Grids

P/BV as % of Last 5Y Average*

Russian electric utilities

display a highly

pronounced discount to

international peers on key

valuation metrics.

Metals & mining, as well

as retail, look overvalued

compared to international

peers.

It is best to avoid retail and

mobile telecoms and

instead search for value in

electric utilities / metals &

mining from an

opportunistic point of view.

Sector Relative Valuations (continued)


29%

4%

-3%

-21%

-35%

-41% -42% -43%

-51%

-60%

-40%

-20%

0%

20%

40%

P/E 13E Premium/Discount Relative to International Peers

3,0%

-24% -24%

-30%

-51% -51% -53%-55%

-70%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

P/BV Premium / Discount Relative to International Peers

7%

-11% -12%

-23%-25%

-31%

-56%

-69%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

EV/EBITDA 13E Premium/Discount vs International Peers

Metals&Mining

Oil&Gas

Mobile Telecoms

Fixed-line TelecomsElectricity GenerationElectric Grids

Banking

Consumer Staples

Retail

Transportation

Fertilizer

0%

20%

40%

60%

80%

100%

120%

140%

30% 40% 50% 60% 70% 80%

P/

BV

as

% o

f La

st 5

Y A

vg

% Buys

Electric Utilities / Metals&Mining worth a look based on a contrarian approach. Retail and Mobile telecom sectors look overheated

Cheap and

Unpopular

Expensive and

Popular

Equities: Cycle-Adjusted Valuations

All key sectors (except retail

and mobile) presently trade

with significant discounts to

historical average P/E ratios,

using their long-term EPS

trend in the denominator.

Normalization of sector

ROEs toward long-term

sustainable levels could

provide a huge earnings

boost for metals & mining as

well as electric utilities.

However, profitability in

banking and retail names

look vulnerable in the long

term.


14.7%

13.8%

-13.4%

-26.8%

-29.2%

-48.8%

-52.7%

-53.7%

-65.3%

-78.5%

-90% -70% -50% -30% -10% 10% 30%

Mobiles

Retail

Base Metals

Oil&Gas

Steel

Banking

Gazprom

Discos

Gold

Gencos

Trend P/Es as % of Historical Average

28.3%

16.1%

7.9%

3.9%

-9.5%

-10.2%

-24.5%

-27.1%

-29.1%

-30.2%

-50% -30% -10% 10% 30% 50%

Retail

Mobiles

Banking

Oil&Gas

Base Metals

Gazprom

Steel

Discos

Gencos

Gold

Consensus Forward 12m EPS as % of Long-Term Trend

-61.0%

-39.6%

-35.1%

-20.0%

-14.4%

-14.0%

-3.2%

2.4%

8.8%

9.2%

46.9%

-100% -50% 0% 50% 100%

Steel

Base Metals

Discos

Gencos

Gazprom

Mobiles

Fertilizers

Fixed-Line Telcos

Oil&Gas

Banking

Retail

Consensus EPS Revisions 2011-2012 (peak to trough), %

92.1%

76.1%

58.1%

32.6%

26.2%

25.6%

-1.0%

-6.8%

-7.4%

-27.3%

-47.9%

-75% -25% 25% 75% 125%

Electric Grids

Electric Gencos

Metals&Mining


Transportation

Fertilizers

Oil&Gas

Retail

Fixed-line Telcom

Mobile Telcos

Banking

EPS Revisions Resulting Form ROE Normalization

What Growth Rates Does The Market Discount?

Based on two-stage DDM, all

sector valuations except for

Retail imply negative growth

rates for the next 5 years.

Sectors typically considered

to be “growth” now discount

very cautious assumptions in

respect to future growth

rates.

Assumptions: During next 5 years dividends gradually increase to the

level warranted by LT sustainable ROE and payout ratios, Risk-free

rate assumption is 3.5%, ERP = 8%.


Sector

Forward

12m

P/E

LT ROE

Dividend

payout,

%

Target

P/E

Implied

Growth (5y)

Oil&Gas 4.4 12.0% 70% 8.9 -15.9%

Metals&Mining 9.0 15.0% 70% 10.0 -2.6%

Banking 5.7 15.0% 50% 12.5 -17.9%

"No-growth" Sector 9.1 12.0% 50% 9.1 0.0%

Mobiles 9.8 20.0% 80% 10.7 -2.1%

Fixed Line 9.4 15.0% 70% 10.0 -1.5%

Utility Gencos 7.8 11.0% 90% 8.7 -2.7%

Utility Discos 8.4 11.0% 90% 8.7 -0.8%

Consumer Goods 5.9 15.0% 60% 10.9 -14.2%

Retail 21.4 15.0% 50% 12.5 14.3%

RTS Index 5.9 15.0% 70% 10.0 -12.4%

DDM-implied Next 5-year Growth Rates

14.3%

0.0%

-0.8%

-1.5%

-2.1%

-2.6%

-2.7%

-12.4%

-14.2%

-15.9%

-17.9%

-30% -20% -10% 0% 10% 20%

Retail

"No-growth" Sector

Utility Discos

Fixed Line

Mobiles

Metals&Mining

Utility Gencos

RTS Index

Consumer Goods

Oil&Gas

Banking

5Y EPS CAGR, %

DDM-implied EPS CAGR for next 5 years

0%

10%

20%

30%

40%

50%

60%

5% 15% 25% 35% 50% 70% 90% 120% 160% 200% 400%

Dif

fere

nce

in th

e a

vera

ge

gro

wth

rate

(5-

yea

r ho

rizo

n)

P/E Premium, %

The theoretical relationship between the P/E premiums and the average annual growth in earnings per 5-year horizon, compared with the company without growth

60

70

80

90

100

110

120

130

140

Rel

ativ

e pe

rfo

rman

ce

Growth Performance Relative to Value (based on MSCI Russia sub-indices)

VTB Capital Investment Management

10 Presnenskaya Emb. Block C

Moscow, Russia 123317

Tel: +7 (495) 725-55-40

Fax: +7 (495) 725-55-38

Contacts

Disclaimer This is a marketing communication. It is not a research report. This document has been prepared by VTB Capital Investment Management Limited and/or one of its affiliates (“VTB Capital IM"), for information purposes

only and is solely intended for the use of the intended recipient(s). This document may include an indicative summary of the terms and conditions of the securities/transaction described herein and may be amended,

superseded or replaced without notice. The conditions of the securities/transaction will be set out in full in the applicable binding transaction document(s).

Not an offer: This document does not constitute an underwriting commitment, an offer of financing, an offer to sell, or the solicitation of an offer to buy or sell any securities described herein, which shall be subject to

VTB Capital IM internal approvals.

Not advice: VTB Capital IM is acting solely as principal and not as advisor or fiduciary. You must independently determine, with your own professional advisors, the appropriateness of any contemplated transaction or

investment. No part of this material constitutes tax, legal, accounting, financial or investment advice and should not be construed as such.VTB Capital IM accepts no liability whatsoever for any consequential losses

arising from the use of this document or reliance on the information contained herein.

Accuracy: Whilst every care has been taken in preparing this material, VTB Capital IM does not guarantee the accuracy or completeness of information which is contained in this document and which may have been

obtained from or is based upon data from third party sources. All information contained herein is subject to change without any notice. VTB Capital IM assumes no duty to update any of the content.

Opinions: Information and opinions contained herein have been compiled or arrived at by VTB Capital IM from publicly available information and sources that VTB Capital IM believes to be reliable. Any views

expressed represent the personal assessment of the author(s) only and do not necessarily reflect the views of VTB Capital IM and/or any of its worldwide affiliates (collectively, the “VTB Group”). All opinions and

estimates are given as of the date hereof and are subject to change.

Past performance: The value of any investment may fluctuate as a result of market changes. Past performance is not indicative of future performance. The information in this document is not intended to predict actual

results and no assurances are given with respect thereto.

Risks: Certain transactions, including futures, options and other derivatives, involve significant risk, and may not be suitable for all investors. Many persons, physical and legal, may be restricted from dealing in the

securities markets. Investors should perform their own due diligence before investing. Importantly, securities and financial instruments denominated in foreign currencies and ADRs and other investments are subject to

exchange rate fluctuations that may adversely affect the value of the investment. The value of investments may fall as well as rise and investors may not get back the amount invested.

Conflicts: The VTB Group may and may seek to do business with any companies covered in this material. Thus, investors should be aware that the VTB Group may have a conflict of interest that could affect the

objectivity of this material. The VTB Group, its officers, directors, and employees may from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to

in this material, and other divisions of the VTB Group outside of the sales and trading division may perform investment banking or other services for any companies mentioned herein.

Professional Investors only: This material is intended only for persons regarded as investment professionals as defined in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion Order) 2001

(or equivalent outside of the UK) or those that would be classified as Eligible Counterparties or Professional Clients/Investors under the Financial Services Authority’s Conduct of Business rules (or equivalent outside of

the UK) and is not intended to be distributed directly or indirectly to any other class of person. It is not available to any retail investor. This material is intended for Institutional Investors only in connection with its

distribution in the US.

THIS DOCUMENT DOES NOT DISCLOSE ALL THE RISKS AND OTHER ISSUES RELATED TO AN OR POTENTIAL INVESTMENT IN THE SECURITIES/TRANSACTION. PRIOR TO TRANSACTING, POTENTIAL

INVESTORS SHOULD ENSURE THAT THEY FULLY UNDERSTAND THE TERMS OF THE SECURITIES/TRANSACTION AND ANY RISKS ASSOCIATED THEREWITH. THIS DOCUMENT IS NOT A

PROSPECTUS. INVESTORS SHOULD ONLY SUBSCRIBE FOR ANY TRANSFERABLE SECURITIES DESCRIBED HEREIN ON THE BASIS OF INFORMATION IN THE LEGALLY BINDING TRANSACTION

DOCUMENT(S) AND NOT ON THE BASIS OF ANY INFORMATION PROVIDED HEREIN.

Copyright VTB Capital 2012 (all rights reserved).

John Papesh

Head of International Distribution

E-mail: [email protected]

Tel: +971 (4) 377-07-92

Vladimir Potapov, CFA

Chief Executive Officer

Global Head of Portfolio Management

E-mail: [email protected]

Tel: +7 (495) 725-55-40

www.vtbcapital-im.com

http://www.vtbcapital-im.com/



investment outlook · slide 1 investment outlook 2q 2013 april 2013 equity and fi research team vtb...

Documents