Morning Brief: November 12, 2009 Key Upcoming Events

Top 6 Gainers:

November 12-13 Silvinit 3Q09 RAS (estimated) November 12 MTS 3Q09 IFRS November 13 Novatek 3Q09 IFRS Uralkali 3Q09 RAS (estimated) November 16 Evraz 3Q09 interim management statement November 17 Comstar 3Q09 US GAAP AFI Development 3Q09 IFRS

Top 6 Losers:

$37.9 $2.38 $20.3 $0.86

11.2% 8.0% -4.2% -3.7%

TGKK $0.0005 RMG $5.08 TMKS $19.2 TGKD $0.0003

11.1% 7.4% -3.8% -3.6%

URSI VSMZ GLTR NVTK

$0.027 $911 $9.05 $58.5

9.6% 6.8% -3.7% -3.1%

Russian Market Equity Market Comment, p. 2

Equity markets 1 700

NVNG VTEL MTL LSNG

Dashed hopes

Index

The Russian market got off to a strong start yesterday but declined throughout the rest of the day even as oil rose. A late-day surge in the price of crude looked likely to pull Russian equities out of the doldrums, but bearish sentiments prevailed as US markets pared early gains, and both indices closed down slightly (RTS -0.2%, MICEX -0.5%). WTI crude for December delivery was trading at around $79.5 at the end of business in Moscow, about 60¢ above where it was when markets opened. This morning, however, with oil falling off that level and Asian stocks losing, we expect Russia to open down.

1 600 1 500 1 400 1 300 1 200 1 100 1 000

Top Stories

900 9 Sep 15 Sep 21 Sep 25 Sep 1 Oct

7 Oct 13 Oct 19 Oct 23 Oct 29 Oct 5 Nov 11 Nov

Source: RTS, PFTS, Bloomberg

Banking: Sberbank plans to begin provisions recovery in 2010; POSITIVE

Russian equity market chart, see p. 2 Ukrainian equity market chart, see p. 7

The bank’s indication that a provision-to-loan ratio of 14% could be the maximum level is good news and will allow Sberbank to boost ROE to around 20%.

RTS

PFTS re-based

MSCI GEM re-based

Equity indices, currencies, commodities Russian RTS RTS-2 RTX MICEX Ukrainian PFTS International MSCI Russia MSCI GEM DJIA S&P 500 Shanghai Comp FTSE 100 NIKKEI 225 ASX ISE 100 Bovespa R/$ Exchange Rates CBR SELT tomorrow UAH Exchange Rates UAH/$ $/Euro Exchange Rate $/Euro Commodities Brent, $/bbl Urals, $/bbl WTI, $/bbl Nickel, $/ton * Copper, $/ton * Gold, $/oz Palladium, $/oz

Close

Change 1 %

YTD %

1 434 1 349 2 133 1 316

-0.2 1.2 -0.3 -0.5

127.1 146.0 116.0 112.4

648

1.1

114.9

812 972 10 291 1 099 3 164 5 267 9 804 2 163 48 864 66 431

-0.5 0.9 0.4 0.5 -0.4 0.7 -0.7 0.3 1.5 0.2

104.4 71.4 17.3 21.6 73.8 18.8 10.7 -34.2 81.9 76.9

28.7007 28.6762

-0.1 -0.2

-2.4 -2.4

7.99

0.0

3.8

1.4999

0.1

7.4

77.83 77.43 79.28 16 850 6 540 1 121 350

0.8 0.9 0.3 0.1 0.2 0.3 1.7

86.4 85.1 77.8 44.0 113.0 27.0 87.2

1

Telecoms: TeliaSonera and Altimo agree to combine Turkcell and MegaFon into a new company; POSITIVE In our view, this deal will be welcomed by investors, as it further demonstrates Altimo's commitment to improved corporate governance and transparency and will improve the liquidity of the telecom assets involved.

Utilities: Inter RAO acquires FGC’s stake in Kuzbassenergo to swap it for SUEK’s stake in TGK-11; POSITIVE This acquisition scheme involving SUEK has been presented to the market before, but this news is POSITIVE for Inter RAO since the deal is confirmed to be on track.

Fertilizers: Silvinit upgrades its potash; NEUTRAL As the market for fertilizer with 99-100% potash content is very tight, we regard the news as NEUTRAL for the company’s stock.

Ukrainian Market Market Comment, p. 7 Day of disappointing macroeconomic data ahead Thursday promises a cold shower for the stock market, a chilling stream of US data on jobless claims, petroleum stocks and the budget.

* - 3 months forward

The contents of this document have been prepared as Investment Research within the meaning of Article 24 of Commission Directive 2006/73/EC implementing the Markets in Financial Instruments Directive (2004/39/EC). Please refer to the further important information in relation to this Document located on the last page.

Equities

ALFA’S TOP PICKS LUKoil

Ticker Target Price Upside to Target Investment Rationale LKOD $74.2 22% LUKoil is undervalued by all accounts. Its production is not growing, but the quality of its cash flow is high and cost controls and discipline are in place. We think that, all else being equal, the company will generate acceptable cash flow growth from its refining and retail operations. Moreover, LUKoil is currently trading at a unjustifiably steep discount to Rosneft, although the stock’s heavy weighting in certain MSCI indices could hinder the full closing of this discount. Our current valuation assumes a YE09 oil price of $60/bbl. In our alternate valuation, assuming a price $10/bbl higher, LUKoil’s FVPS jumps 24% to $92.1.

RusHydro

HYDR

$0.051

35%

We believe RusHydro’s current share price reflects all the negative consequences of the accident at Sayano-Shushenskaya HPP. This makes the stock attractive again, especially given that its discounts to global peers have widened. RusHydro remains the best liberalization play in the Russian power universe in addition to having one of the sector’s most flexible CAPEX programs.

Petropavlovsk

POG

1509p

16%

Petropavlovsk provides the highest-volume growth profile in Russia's precious metals universe, adding 100 koz per annum in the 2008-2012 period, doubling production over four years. Mining costs are falling as scale is achieved at Pioneer mine, which will allow EBITDA to more than double between 2008 and 2010. After disappointing investors for years, the company has delivered its promised 2009 production growth, which should allow it to regain investor trust and rerate to sector multiples plus a growth premium. Additionally, the company has large longdated iron ore reserves on the doorstep to China, and over the course of 4-6 quarters it should be able to negotiate a JV with a Chinese investor, unlocking between $200-500 mln of value.

Comstar

CMST

$6.98

34%

Comstar offers an attractive risk-reward profile, as the upside from a potential linkup with MTS and a possible asset swap with Svyazinvest are not reflected in the current share price. Investors who buy the stock today effectively get a free option on both. The price being paid by MTS to acquire a 51% stake in Comstar should serve as a share-price floor, or at least limit downside, in our view.

VIP

$23

12%

VIP is our preferred play on the Russian mobile space, given an improving risk profile, including the recent agreement by key shareholders Altimo and Telenor to settle all outstanding litigation and merge their interests in VIP and Kyivstar into a new NY-listed company, VimpelCom Ltd. Given strong cash generation, synergy potential and strong alignment of shareholder interests, we see scope for a healthy dividend payout as well as an acceleration of growth for the new entity. In terms of VIP's core operations, we see scope for earnings enhancement driven by cost-optimization and de-leveraging. We also believe the stock offers good visibility around potential short-term catalysts, including synergies from the integration of Golden Telecom and potential for accelerating relative subscriber momentum given a broader distribution reach. In our view, VimpelCom looks undervalued relative to its peer MTS, trading at a 5% discount on 2010 EV/EBITDA despite an improving debt and leverage profile. The stock also offers a superior one-year forward FCF yield of 11.0%.

AKRN

$32.62

40%

Acron is our top fertilizer pick because 1) the company trades at a 52% discount to Yara on 2010E EV/EBITDA (4.2x vs. 8.9x), which is unjustified; 2) natural gas prices in the US have increased by 90% since September 4 in response to seasonal factors, which after a time lag will have a positive effect on nitrogen fertilizer prices; 3) the value of Acron’s stakes in Silvinit, Apatit and Sberbank has appreciated from $345 mln to $440 mln since September 4; 4) the firm has successfully restructured its short-term debt (it sold its 21% stake in Sibneftegaz for $132 mln and placed RUB3.5 bln in four-year bonds at an attractive rate of 14.05% p.a.).

VimpelCom

Acron

Source: Alfa Research For more information, please contact the Alfa Bank sales team at (+7 495) 223-5500 or 223-5522

2

The Morning Brief November 12, 2009

Equities

RUSSIAN MARKET Russian equity market 1600

$ mln

Index 1500

11000 10500 10000 9500

1400

9000 8500

1300

8000 7500

1200

7000 6500

1100

6000 5500

1000

5000 4500

900

4000 3500

800

3000 2500

700

2000 1500 1000

600

500 500 9 Sep

15 Sep

21 Sep

25 Sep

RTS vol

1 Oct

MICEX vol

7 Oct ADR vol

13 Oct RTS Index ($)

19 Oct

23 Oct

MICEX Index (Rur)

29 Oct

5 Nov

0 11 Nov

RTS2

Source: RTS, MICEX, Bloomberg

Equity Market Comment Dashed hopes The Russian market got off to a strong start yesterday but declined throughout the rest of the day even as oil rose. A late-day surge in the price of crude looked likely to pull Russian equities out of the doldrums, but bearish sentiments prevailed as US markets pared early gains, and both indices closed down slightly (RTS -0.2%, MICEX -0.5%). WTI crude for December delivery was trading at around $79.5 at the end of business in Moscow, about 60¢ above where it was when markets opened. This morning, however, with oil falling off that level and Asian stocks losing, we expect Russia to open down. The big events on tap for today are the release of US jobless data at 4:30 pm and crude oil inventories at 7 pm Moscow time. At $1,700 mln, volumes for the large stocks on MICEX were 32% below the 30-day average. London volumes, at $1,080 mln, were some 4% below their 30-day average. Among the super-blue chips in London trading, Gazprom fell 1.2%, LUKoil fell 0.5%, Rosneft rose 0.4%, and Norilsk Nickel rose 0.4%. Sberbank fell 0.4% in dollar terms in local trading. Among the blue chips, Federal Grid Company (+19.4%), NLMK (+1.4%), Transneft pref (+1.2%), X5 Retail Group (+1.1%), and Evraz (+1.1%) rose, while Mechel (-4.2%), TMK (-3.8%), Novatek (-3.1%), Surgutneftegaz (-2.2%), and VTB (-2.2%) fell. US markets were up overnight, as the Dow added 0.4%, or 44 points, to 10,291, and the S&P 500 rose 0.5%. Asian markets are generally losing this morning, with Japan off 0.8%, Hong Kong down 0.5%, China up 0.4%, and Australia off 0.2%.

The Morning Brief November 12, 2009

3

Equities Among global sectors that we follow, the miners and US financials led the way, each rising 1%, while gold companies and oil & gas were flat. In Asia this morning, steel companies are up 0.9%, while oil & gas companies are down 0.4%. Brazilian trading overnight saw Petrobras fall some 0.4%. Nymex crude rose $0.2 in overnight US trading to $79.3/bbl, though in morning trading in Asia oil has dropped $0.1 to trade at the $79.2/bbl level. Nickel prices rose 0.1%, or $25, in London trading yesterday to $16,850/ton, while copper rose 1.9% to $6,596/ton. David Spencer Chief Research Editor (+7 495) 745-7153

Banking Sberbank plans to begin provisions recovery in 2010; POSITIVE SBER RU Closing Price: Market Cap:

U/R $2.46 $53.1 bln

Yesterday, Sberbank’s senior vice president Denis Bugrov summarized the results of the first year of the bank’s five-year development strategy, and outlined plans for next year. According to Mr. Bugrov, the bank’s provisions for loan losses are expected to reach 12-14% in 1H10, and after that the bank plans to begin to improve provisions. Bugrov also expects the bank to increase employee compensation by an average of 15% in 2010. In 9M09, Sberbank’s provision-to-loan ratio was 8.9%, by the end of 2009 this ratio is expected to slightly exceed 10%. To reach a ratio of 14%, the bank has to provision around RUB300 bln in 2010. Assuming that this year the monthly average increase in provisions was RUB31 bln, this will represent some nine months of close to zero net profit. Bugrov’s comments imply that 14% could be the highest provisioning level and this is therefore good news. As of 2011, Sberbank will be able to substantially reduce provision charges and even recover provisions, thereby increasing its ROE to around 20%. Sberbank intends to increase salaries in line with our expectations. In our model, we assume that Sberbank will increase staff costs by 18% y-o-y in 2010, and expect the bank will moderately increase the number of its employees. In 1H09, the bank reduced employee numbers by 5,800, or 3.6%, in line with its optimization strategy. Natalia Orlova, Ph.D. Senior Analyst (+7 495) 795-3677 Leyla Sharifullina Analyst (+7 495) 780-4739

Telecoms TeliaSonera and Altimo agree to combine Turkcell and MegaFon into a new company; POSITIVE TeliaSonera and Altimo have agreed to combine their ownership interests in Turkcell and MegaFon into a new company to be incorporated in a western jurisdiction and listed on the New York Stock Exchange. The new company will own a majority of the shares in both Turkcell and MegaFon. AF Telecom, the third major shareholder in MegaFon, is also invited to join the partnership. Should AF Telecom participate, the shareholders would have roughly equal control and influence over the new company. TeliaSonera and Altimo have also agreed to collaborate to resolve all ongoing legal disputes between each of them and Çukurova Group, paving the way for a speedy resolution of all conflicts. Subject to the resolution of the dispute, Altimo would acquire Çukurova Group’s indirect shareholding in Turkcell and 4

The Morning Brief November 12, 2009

Equities contribute those shares to the new company without any premium. TeliaSonera would also acquire 100% in Fintur Holdings by buying Turkcell’s shares in the company at fair market value. The deal will create a leading international operator, with over 90 mln subscribers in Russia, Turkey and the CIS countries, under a more transparent and robust corporate governance framework. The new company will focus on optimizing the core Turkcell and MegaFon businesses as well as expanding into new emerging markets. The shareholders will agree on a long-term dividend policy and pay regular dividends. As Turkcell and MegaFon will continue to be managed as separate operations, we see limited scope for major operational synergies on the back of this deal. However, the operators will have the potential to benefit from shared know-how and we see some benefits from certain shared services as likely. In our view, this deal will be welcomed by investors, as it further demonstrates Altimo's commitment to improved corporate governance and transparency and will improve the liquidity of the telecom assets involved. Elena Mills Senior Analyst (+7 495) 795-3742 Ekaterina Balykina Analyst (+7 495) 795-3655

Utilities

IRAO RU Closing Price: Target Price: Return to TP: Market Cap:

O/W $0.00099 $0.00150 52% $2.3 bln

Inter RAO acquires FGC’s stake in Kuzbassenergo to swap it for SUEK’s stake in TGK-11; POSITIVE According to several media sources, Inter RAO UES in the Baltics, a wholly owned subsidiary of Inter RAO, yesterday acquired an 18.9% stake of Kuzbassenergo (TGK-12) from the Federal Grid Company (FGC). Inter RAO plans to swap this stake for SUEK’s 25% stake in TGK-11. In the aftermath, Inter RAO will gain control of TGK-11, which is one of its acquisition targets among local generating assets. SUEK currently owns 44% of TGK-12 and is seeking to gain control of it. Inter RAO may end up with 83% ownership of TGK-11. Inter RAO has already formed an agreement to obtain Rosneft’s 7% minority stake in TGK-11. The company is also negotiating with E4 group, which acquired 27.45% of TGK-11 in 2008 and is now paying FGC for this stake in installments. This acquisition scheme involving SUEK has been presented to the market before, but this news is POSITIVE for Inter RAO since the deal is confirmed to be on track. It reinforces our bullish view on the stock, whose major catalyst is its aggressive acquisition strategy. However, the price paid for FGC’s stake in TGK-12 is not yet known. Our positive view of this deal would be undermined if Inter RAO paid more than the market price for the stake in TGK-12 that it plans to give to SUEK. Alexander Kornilov, Ph.D. Senior Analyst (+7 495) 788-0334 Elina Kulieva, Ph.D. Analyst (+7 495) 789-8509

The Morning Brief November 12, 2009

5

Equities

Fertilizers Silvinit upgrades its potash; NEUTRAL SILV RU O/W Closing Price: $698 Target price $908 2009 EV/EBITDA: 9.6x 2010 EV/EBITDA: 6.4x Market Cap: $5.466 bln

Silvinit reports that it has begun producing fertilizer with potash content of 99%. The annual capacity of the higher-value-added product is estimated at over 650,000 t. The new higher-grade mineral will be produced at the same production capacity as the 95% and 98% mineral content the company currently produces, meaning Silvinit’s overall capacity (5.5 mln t per annum) will not change. Silvinit will adjust its current production depending on real demand for the 99%-potash fertilizer. The market price for 99-100% potash content mineral exceeds $1000 vs. $460-500 for the standard product; however, the market for the higher-grade mineral is very tight. For example, 2008 Russian domestic consumption is estimated at 60-65 thousand tons vs. 1,550 thousand tons for the standard product. The same situation is played out on the global market. Georgy Ivanin Senior Analyst (+7 495) 795-3713

6

The Morning Brief November 12, 2009

Equities

UKRAINIAN MARKET Ukrainian equity market 700

$ mln

Index

14.0

600

12.0

500

10.0

400

8.0

300

6.0

200

4.0

100

2.0

0 0.0 10 Sep 16 Sep 22 Sep 28 Sep 02 Oct 08 Oct 14 Oct 20 Oct 26 Oct 30 Oct 05 Nov 11 Nov Volume, $ mln

PFTS

Source: Bloomberg, PFTS

Market Comment Day of disappointing macroeconomic data ahead Thursday promises a cold shower for the stock market, a chilling stream of US data on jobless claims, petroleum stocks and the budget. Growing unemployment, stable inventories of oil and a mushrooming budget deficit are likely to provide a series of negative surprises for the market. Markets worldwide will probably return to negative territory today, and the Ukrainian market will be no exception. Activity was sluggish yesterday, as expected, with moderate trading volumes and sideways price fluctuations of leading stocks. Banking stocks saw a moderate correction following Tuesday’s gains, with both Ukrsotsbank and Bank Aval losing approximately 1%. Stakhaniv Railcar Plant (+4.3%) unexpectedly climbed on the announcement that output recovered to precrisis levels in 4Q09. Some limited demand was seen for Enakievo Steel Plant (+0.8%) and Centerenergo (+1.9%) stocks, but Wednesday gains may well be eliminated today. Denis Shauruk Analyst (+380 44) 490-1721

The Morning Brief November 12, 2009

7

Equities

RUSSIAN MARKET TABLES Figure 1: Most liquid stocks performance Main ticker

Gazprom Rosneft LUKoil Surgutneftegaz Gazpromneft Novatek Tatneft Transneft pref. Sberbank VTB Group Norilsk Nickel Novolipetsk Steel Polyus Gold Evraz Group Mechel Steel Group MMK Severstal

OGZD LI ROSN LI LKOD LI SGGD LI GAZ LI NVTK LI ATAD LI TRNFP RX SBER03 RX VTBR LI MNOD LI NLMK LI PLZL LI EVR LI MTL US MMK LI SVST LI

VimpelCom MTS Sistema Rostelecom FGC RusHydro Uralkali

VIP US MBT US SSA LI RTKM RX FEES RX HYDR RX URKA LI

$

%

%

100d Avg Daily Volume $ mln

$ mln

%

25.4 8.6 61 9.5 26 59 29.4 875 2.42 4.45 14.7 29 32 27 20.3 10.6 8.1

-1.2 0.4 -0.5 -1.3 -0.5 -3.1 -3.6 0.1 -0.4 -2.2 0.4 1.4 -0.4 1.1 -4.2 0.2 0.6

78 129 89 85 152 205 180 271 213 105 130 183 169 214 408 308 197

1149.9 264.3 363.7 58.1 8.9 25.6 27.0 23.3 1072.2 215.9 307.1 15.1 51.4 30.0 64.7 7.7 21.5

150 386 91 144 51 629 33 761 24 712 17 762 10 672 7 423 52 346 23 275 27 927 17 296 12 326 11 174 9 632 9 129 8 203

36 15 55 20 4 47 21 75 27 14 40 13 33 15 25 12 18

54 981 14 036 28 396 6 752 1 062 8 348 2 241 1 019 14 133 3 365 11 170 2 248 4 067 1 676 2 407 1 095 1 476

6.0 6.0 3.7 2.5 2.6 1.0 3.7 7.5 27.7 21.9 9.0 2.1 4.6 5.2 10.1 2.2 4.4

u/r 8.2 74.2 12 u/r u/r 30.0 u/r u/r u/r 13.3 17.5 30.65 22.8 18.6 5.8 5.2

n/a -5 22 27 n/a n/a 2 n/a n/a n/a -9 -39 -4 -16 -8 -45 -36

u/r E/W O/W O/W u/r u/r E/W u/r u/r u/r O/W U/W O/W U/W E/W U/W U/W

20.6 50 18.5 6.7 0.0124 0.0378 24.3

0.1 -0.5 -1.1 1.1 2.9 1.8 -0.1

188 87 236 -24 197 85 173

72.5 77.7 6.7 8.7 20.1 36.8 33.8

21 138 19 925 8 921 4 899 14 338 10 192 10 325

24 46 19 12 17 20 35

5 136 9 165 1 695 587 2 437 2 089 3 613

4.6 2.5 1.3 4.3 2.7 4.5 2.6

23 60 u/r u/r 0.0125 0.051 26.07

12 20 n/a n/a 1 35 7

O/W O/W u/r u/r E/W O/W O/W

Close Change

YTD

MCap

Annual Free-float 12 M TP Upside churn* $ mln x $ %

Free-float estimate

Rating

Source: RTS, MICEX, Bloomberg, Alfa Research; * Annual Free-float Churn = aggregate annualized trading volume / free-float (stock); the higher the number, the more actively the stock trades in relative terms

Figure 2: Most liquid preferred stocks performance Main ticker

Sberbank Rostelecom Surgutneftegaz Tatneft North-West Telecom Volga telecom South Telecom Sibir Telecom Uralsvyazinform

SBERP03 RX RTKMP RX SNGSP RX TATNP3 RX SPTLP RX VTELP RX UTELP RX STKMP RX URSIP RX

Close Change

YTD

$

%

%

1.81 2.34 0.487 2.11 0.37 1.71 0.061 0.027 0.0209

-2.5 4.3 0.8 0.1 2.4 8.6 3.2 7.4 7.4

488 367 135 205 106 259 207 250 235

100d Avg Discount Daily to Volume commons $ mln % 236.6 19.2 45.5 0.5 0.3 0.5 0.2 0.3 0.3

-25 -65 -48 -57 -24 -28 -16 -26 -23

Annual Free-float 12 M TP Upside churn* $ mln x $ %

Free-float estimate % 100 100 70 41 100 100 100 100 100

1 812 569 2 627 128 92 140 59 105 163

57.5 11.7 6.0 1.5 1.2 1.2 1 0.8 0.7

u/r u/r u/r u/r u/r u/r u/r u/r u/r

n/a n/a n/a n/a n/a n/a n/a n/a n/a

Rating

u/r u/r u/r u/r u/r u/r u/r u/r u/r

Source: RTS, MICEX, Bloomberg, Alfa Research; * Annual Free-float Churn = aggregate annualized trading volume / free-float (stock); the higher the number, the more actively the stock trades in relative terms

8

The Morning Brief November 12, 2009

Equities

Figure 3: Local share price performance 100d Avg Daily Volume % $ mln

YTD

Annual Free-float 12 M TP Upside churn* $ mln x $ %

MCap

Free-float estimate

$ mln

%

28 683 3 488 1 569 1 391 1 050 993 854 737 681 400 205

3 10 6 25 25 4 25 11 15 13 10

Main ticker

Close Change $

%

TNK-BP Bashneft Megionneftegaz Salavatnefteorgsyntez RITEK Novoil Ufaneftekhim Nizhnekamskneftekhim Ufa Refinery KazanOrgsyntez Yaroslavnefteorgsintez

TNBP RU BANE RU MFGS RX SNOZ RU RITK RX NUNZ RU UFNC RU NKNC RX UNPZ RU KZOS RU JNOS RU

1.81 20.5 15.8 75 7.3 1.25 3.1 0.458 1.25 0.224 0.22

-1.1 n/t 2.2 n/t 0.0 2.0 n/t -3.0 4.2 n/t n/t

178 412 164 36 326 317 244 169 191 49 -56

0.2 0.1 0 0 0 0 0.1 0.1 0.1 0 0

Bank of Moscow Rosbank IngosStrakh Uralsib Vozrozhdenie Bank St.-Petersburg TMK Raspadskaya Mine Polymetal Kuzbassrazrezugol Vyksa Pipes Southern Kuzbass Coal Chelyabinsk Pipes VSMPO Belon SibirCement PGHO Chelyabinsk Zinc Vorkutaugol Comstar-UTS MGTS Uralsvyazinform Center Telecom Volga telecom Sibir Telecom North-West Telecom Sitronics Dalsvyaz RBC South Telecom MRSK Holding Mosenergo OGK-5 OGK-4 Inter RAO OGK-3 Irkutskenergo MOESK TGK-1 TGK-7 (Volzhskaya TGK) TGK-10 OGK-1 MRSK Center OGK-2 Bashkirenergo TGK-9 OGK-6 MRSK Siberia MRSK Ural MRSK Northwest MRSK Volga MRSK Center-Volga TGK-6 TGK-4 Lenenergo Novosibirskenergo TGK-5 Kuzbassenergo TGK-2 RAO ES of Far East MRSK South Yeniseyskaya TGK TGK-11

MMBM RX 25.5 ROSB RX 3.44 INGS RU 0.55 USBN RU 0.006 VZRZ RX 40 BSPB RX 3.06 TRMK RX 4.8 RASP RX 4.44 PMTL RX 9.5 KZRU RU 0.265 VSMZ RU 920 UKUZ RU 38 CHEP RU 1.95 VSMO RX 76 BELO RX 0.65 SCEM RU 22 PGHO RU 230 CHZN RX 2.96 VOUG RU 50 CMST RX 5.6 MGTS RX 15.1 URSI RX 0.027 CTLK RX 0.5 VTEL RX 2.38 STKM RX 0.0364 SPTL RX 0.483 SITR RU 0.03 DLSV RX 3.13 RBCI RX 1.72 UTEL RX 0.073 MRKH RX 0.129 MSNG RX 0.098 OGKE RX 0.078 OGK4 RX 0.057 IRAO RX 0.00104 OGKC RX 0.0495 IRGZ RX 0.464 MSRS RX 0.042 TGKA RX 0.00048 VTGK RX 0.0453 TGKJ RX 1.34 OGK1 RX 0.026 MRKC RX 0.027 OGK2 RX 0.033 BEGY RX 1.01 TGKI RX 0.000118 OGK6 RX 0.0272 MRKS RX 0.0084 MRKU RX 0.0085 MRKZ RX 0.0075 MRKV RX 0.00397 MRKP RX 0.0061 TGKF RX 0.000348 TGKD RX 0.000334 LSNG RX 0.86 NVNG RX 38 TGKE RX 0.0004 KZBN RX 0.0065 TGKB RX 0.00024 VRAO RX 0.0084 MRKA RX 0.0064 TGK13 RX 0.002 TGKK RX 0.00054

-0.9 1.0 n/t n/t -1.2 3.0 -2.1 0.4 0.7 1.0 n/t n/t n/t -0.6 -1.3 n/t n/t -1.6 n/t 0.9 -0.4 9.6 5.0 8.0 3.1 6.7 n/t 5.8 1.9 5.1 4.8 4.0 2.0 0.7 0.0 -0.7 -1.3 2.4 -3.1 0.3 -2.5 2.5 1.5 2.2 0.4 0.4 0.0 -1.6 0.1 4.2 4.7 3.5 -0.6 -3.6 -3.7 11.2 0.4 0.6 0.4 3.9 -0.6 -0.5 11.1

6 8 67 0 338 172 378 336 115 212 104 363 95 136 71 -45 -14 190 -50 65 123 169 312 335 231 129 0 448 213 233 341 204 122 343 395 297 80 7 337 437 30 124 109 273 395 196 201 242 185 306 74 102 168 45 100 -44 186 162 118 303 269 89 200

0.1 0 0 0 0.5 0.2 5.1 3.7 2.2 0.1 0 0 0 0.9 0.9 0.2 0 0.3 0 3.6 0 8.2 0.9 1.3 0.8 0.4 0 0.2 2.6 0.5 4.4 2.5 0.7 1.8 5.5 1.3 0.5 1.5 1.1 0.9 0 2.1 0.7 2.5 0 0.6 1.9 0.1 0.3 0.3 0.5 0.5 0.2 0.2 0 0 0.3 1.8 0.4 0.6 0 0.2 0

3 507 2 566 1 375 1 225 952 865 4 179 3 468 3 311 1 620 1 580 1 372 921 877 750 665 402 163 123 2 173 1 209 875 791 587 437 426 344 300 241 217 5 288 3 899 2 757 2 486 2 365 2 348 2 210 2 047 1 851 1 359 1 181 1 155 1 145 1 081 1 053 927 877 752 739 716 709 691 648 639 592 513 492 460 350 343 318 318 277

The Morning Brief November 12, 2009

946.5 355.8 94.2 347.8 262.4 45.7 213.4 81.1 102.2 52.0 20.5

22 771.6 2 69.3 5 68.8 4 49.0 34 323.6 20 179.9 23 961.3 18 624.2 25 827.8 6 97.2 5 79.0 7 96.1 15 138.2 20 175.4 17 127.5 5 33.2 15 60.3 48 78.0 7 8.6 34 747.6 5 60.4 25 218.7 24 189.9 32 187.7 30 131.1 25 106.4 17 58.4 30 89.9 30 72.4 33 71.5 33 1 745.1 5 214.9 6 176.4 4 119.3 20 473.0 9 213.5 12 276.3 10 204.7 8 149.9 22 298.9 6 80.8 8 96.1 30 343.6 18 204.4 16 168.5 16 151.1 5 47.5 11 82.8 22 162.5 37 264.7 31 219.8 28 200.3 8 51.9 17 113.1 25 148.1 5 27.8 23 116.2 20 94.2 19 68.0 33 113.1 27 85.9 11 36.3 38 105.1

0.1 0.1 0.1 0 0 0 0.1 0.7 0.2 0.1 0

Rating

u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r

0 u/r 0 u/r 0 u/r 0 u/r 0.5 u/r 0.3 u/r 1.9 3 1.4 5.8 0.8 11.15 0.3 u/r 0.1 u/r 0 u/r 0 u/r 1.5 u/r 2.2 0.78 1.6 u/r 0 u/r 1.3 u/r 0 u/r 1.3 6.98 0.1 u/r 13.5 u/r 1.5 u/r 2.4 u/r 2 u/r 1.5 u/r 0.1 u/r 0.9 u/r 12 u/r 2 u/r 1 u/r 3.9 0.134 1.2 0.061 3.4 0.071 3.4 0.0015 1.4 0.052 0.6 u/r 2.1 u/r 2.7 0.00051 1 u/r 0.1 u/r 6.3 0.02 0.6 u/r 3.9 0.008 0.1 u/r 1 u/r 12 0.022 0.5 u/r 0.6 u/r 0.4 u/r 0.6 u/r 0.8 u/r 1.3 u/r 0.5 u/r 0.1 u/r 0 u/r 0.8 u/r 0.6 u/r 1.7 u/r 1.6 u/r 0.2 u/r 1.5 u/r 0.1 u/r

n/a n/a n/a n/a n/a n/a -37 31 18 n/a n/a n/a n/a n/a 20 n/a n/a n/a n/a 24 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 37 -22 24 44 5 n/a n/a 6 n/a n/a -23 n/a -76 n/a n/a -19 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

u/r u/r u/r u/r u/r u/r E/W O/W O/W u/r u/r u/r u/r u/r E/W u/r u/r u/r u/r O/W u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r O/W O/W O/W O/W U/W u/r u/r O/W u/r u/r E/W u/r U/W u/r u/r E/W u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r

9

Equities TGK-14 MRSK North Caucasus Magnit Baltika Wimm-Bill-Dann Pharmstandard Seventh Continent M-Video Cherkizovo Dixy Synergy Razguliay Group Veropharm Kalina 36.6 Rosinter Nutritek LSR Group PIK Group Open Investments Sistema Hals Silvinit Apatit Acron NCSP Aeroflot FESCO UTair S7 Power Machines KamAZ AvtoVAZ Sollers GAZ OMZ

TGKN RX 0.000111 MRKK RX 2.9 MGNT RX 64 PKBA RX 27 WBDF RX 38.6 PHST RX 55 SCOH RX 9 MVID RX 3.73 GCHE RX 12.9 DIXY RX 7.1 SYNG RX 21.3 GRAZ RX 1.87 VFRM RX 28 KLNA RX 15.2 APTK RX 11.9 ROST RX 8 NTRI RX 3.98 LSRG RX 17.8 PIKK RX 4.24 OPIN RX 52 HALS RX 34 SILV RX 698 APAT RU 270 AKRN RX 31.2 NMTP RX 0.155 AFLT RX 1.49 FESH RU 0.324 TMAT RU 0.285 AVSI RU 750 SILM RX 0.197 KMAZ RX 2.3 AVAZ RX 0.55 SVAV RX 15.3 GAZA RU 27 OMZZ RX 2

3.6 -0.1 2.6 0.2 -0.6 6.9 1.4 1.1 -2.6 3.4 3.6 -0.6 0.0 1.8 0.0 -1.8 -0.6 -1.1 -0.4 1.7 -1.6 0.3 n/t 0.0 0.7 1.9 2.9 n/t n/t 1.1 -0.5 -1.0 -1.2 n/t -0.9

1 247 298 106 186 195 39 330 456 300 239 98 184 162 455 72 128 322 345 -22 267 198 93 210 39 60 1 14 -72 202 206 122 268 200 99

0.2 0.5 7.9 0.1 8.6 1.9 0.3 0.3 0.4 0.2 0.7 0.4 0.3 0.1 1.8 0.1 0.2 2.1 5.5 0.2 0.7 0.3 0 1 1.8 0.8 0.3 0 0 0.1 1.4 1.4 0.7 0 0

151 85 6 410 4 101 3 410 3 046 674 671 627 608 305 295 280 149 113 96 63 3 419 2 106 787 384 5 464 1 684 1 396 2 997 1 657 956 165 77 1 718 1 633 765 526 500 71

22 34.2 n/a n/a 32 2 051.2 5 205.0 34 1 159.4 43 1 309.8 5 33.7 28 194.5 32 200.5 47 285.7 19 58.0 25 73.8 47 131.6 74 109.9 33 37.2 26 25.1 27 17.1 11 376.1 16 337.0 25 196.9 22 84.4 15 819.6 5 84.2 17 237.4 30 899.0 5 82.8 12 114.7 5 8.2 5 3.8 15 257.7 15 244.9 20 153.0 37 194.4 20 100.0 10 7.1

1.5 0 1.3 0.1 2.3 0.5 2.1 0.4 0.9 0.3 3.3 1.4 0.6 0.1 15.7 0.6 3.7 2.3 5.9 0.2 2.7 0.1 0.1 1.2 0.5 2.9 0.5 0.2 0 0.1 1.5 2.3 1.4 0.1 2.3

u/r u/r 64 u/r u/r u/r n/r u/r u/r 6.3 u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r 908 u/r 43.72 u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r

n/a n/a -1 n/a n/a n/a n/a n/a n/a -11 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 30 n/a 40 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

u/r u/r E/W u/r U/W u/r n/r u/r u/r E/W u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r O/W u/r O/W u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r

Source: RTS, MICEX, Bloomberg, Alfa Research; * Annual Free-float Churn = aggregate annualized trading volume / free-float (stock); the higher the number, the more actively the stock trades in relative terms

10

The Morning Brief November 12, 2009

Equities Figure 4: ADR/GDR performance Ratio

Europe Close Change Volume $ % $/1000

YTD %

United States Close Change Volume $ % $/1000

Gazprom 4 in 1 25.4 -1.2 225 391 78 25.2 LUKoil 1 in 1 60.7 -0.5 360 768 89 60.4 Gazpromneft 5 in 1 26.1 -0.5 661 152 26.0 Rosneft 1 in 1 8.6 0.4 185 872 129 n/t Surgutneftegaz 10 in 1 9.5 -1.3 11 120 85 9.4 Tatneft 6 in 1 29.4 -3.6 9 252 180 n/t Novatek 10 in 1 58.5 -3.1 19 873 205 n/t Alliance Oil 1 in 1 14.0 0.5 8 674 88 n/t Integra 1 in 20 3.3 0.0 318 192 n/t Eurasia Drilling 1 in 1 17.5 0.0 1 400 n/t RusHydro 100 in 1 3.8 0.0 7 327 n/a n/t Mosenergo 100 in 1 8.9 0.0 n/a 123 9.8 Irkutskenergo 50 in 1 22.9 1.7 5 76 23.5 OGK-2 100 in 1 3.4 0.0 22 312 n/t MTS 5 in 1 n/t n/t n/a n/a 50.0 VimpelCom 1 in 20 20.7 -0.2 27 153 20.6 Comstar UTS 1 in 1 5.2 -1.0 5 030 32 n/t Sitronics 50 in 1 1.8 0.0 4 200 n/t Sistema 1 in 50 18.5 -1.1 7 177 236 n/t Rostelecom 6 in 1 40.7 1.1 354 -23 40.3 MGTS 1 in 1 12.0 0.0 n/a 60 n/t Center Telecom 25 in 1 12.0 0.0 n/a 300 n/t NW Telecom 10 in 1 4.5 0.0 n/a 131 n/t South Telecom 50 in 1 3.0 0.0 n/a 186 n/t Volga Telecom 2 in 1 4.1 -1.8 n/a 244 4.8 Siberia Telecom 200 in 1 7.1 0.0 n/a 217 6.6 Uralsvyazinform 200 in 1 5.2 4.2 23 115 n/t Far East Telecom 5 in 1 15.0 0.0 n/a 900 n/t CTC Media 1 in 1 n/t n/t n/a n/a 17.4 Rambler 1 in 1 5.1 7.4 2 188 67 n/t Norilsk Nickel 1 in 10 14.7 0.4 56 898 130 14.6 NLMK 10 in 1 28.9 1.4 7 210 183 n/t Severstal 1 in 1 8.1 0.6 6 102 197 n/t MMK 13 in 1 10.6 0.2 992 308 n/t Polymetal 1 in 1 9.5 0.8 910 112 n/t TMK 4 in 1 19.2 -3.8 14 498 391 n/t Polyus 1 in 2 32.1 -0.4 60 544 169 31.8 Highland Gold Mining 1.5 1.1 726 145 n/t Petropavlovsk 21.6 7.1 35 725 245 n/t Trans-Siberian Gold 0.6 3.1 73 168 n/t Mechel 1 in 1 n/t n/t n/a n/a 20.3 Evraz 1 in 3 27.0 1.1 15 973 214 n/t Chelyabinsk Zinc 1 in 1 3.0 0.0 n/a 200 n/t Uralkali 5 in 1 24.3 -0.1 21 876 173 n/t Globaltrans 1 in 1 9.1 -3.7 1 868 546 n/t NCSP 75 in 1 11.7 0.2 14 73 n/t PIK Group 1 in 1 4.3 -0.2 140 342 n/t AFI Development 1 in 1 2.0 1.5 172 233 n/t Sistema-Hals 1 in 20 1.7 -2.3 120 426 n/t LSR Group 1 in 5 7.3 3.5 16 861 n/t RGI International 1.9 0.3 20 293 n/t MirLand 2.7 4.4 62 375 n/t Wimm-Bill-Dann 1 in 1 n/t n/t n/a n/a 77.5 X5 Retail Group 1 in 4 27.6 1.1 14 221 221 n/t Magnit 1 in 5 15.4 2.7 2 628 242 n/t Efes Breweries 5 in 1 13.5 0.0 n/a 200 n/t Cherkizovo Group 1 in 150 9.7 -2.9 52 526 n/t Black Earth Farming 1 in 1 3.7 -1.2 1 728 39 n/t Pharmstandard 4 in 1 20.2 2.6 8 407 90 n/t VTB 2000 in 1 4.5 -2.2 20 405 105 n/t Source: Bloomberg, Alfa Research; Notes: N/T – not traded, price reflects previous day

The Morning Brief November 12, 2009

-1.3 -0.9 -0.4 n/t -2.4 n/t n/t n/t n/t n/t n/t 1.6 0.0 n/t -0.5 0.1 n/t n/t n/t 0.4 n/t n/t n/t n/t 8.0 0.0 n/t n/t 0.4 n/t 0.7 n/t n/t n/t n/t n/t -1.6 n/t n/t n/t -4.2 n/t n/t n/t n/t n/t n/t n/t n/t n/t n/t n/t 4.2 n/t n/t n/t n/t n/t n/t n/t

14 571 3 548 176 n/a 49 n/a n/a n/a n/a n/a n/a 490 n/a n/a 94 472 44 442 n/a n/a n/a 1 925 n/a n/a n/a n/a 16 n/a n/a n/a 3 946 n/a 1 794 n/a n/a n/a n/a n/a 60 n/a n/a n/a 83 892 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 16 624 n/a n/a n/a n/a n/a n/a n/a

YTD % 77 82 161 n/a 75 n/a n/a n/a n/a n/a n/a 96 81 n/a 87 188 n/a n/a n/a -27 n/a n/a n/a n/a 428 193 n/a n/a 263 n/a 132 n/a n/a n/a n/a n/a 159 n/a n/a n/a 408 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 195 n/a n/a n/a n/a n/a n/a n/a

MCap 12 M TP Upside $ mln $ % 150 386 51 629 24 712 91 144 33 761 10 672 17 762 2 405 598 2 570 10 248 3 538 2 176 1 113 19 925 20 870 2 173 344 8 578 4 898 956 756 396 177 584 427 831 286 2 648 78 27 927 17 296 8 203 9 129 3 311 4 179 12 326 475 3 916 47 9 632 11 174 163 10 325 1 059 2 997 2 106 1 063 384 3 419 240 272 3 410 7 487 6 410 571 627 456 3 046 23 275

u/r 74.2 u/r 8.20 12 30.0 u/r u/r 4.5 18.2 5.1 13.4 u/r 0.8 60.0 23.0 6.98 n/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r n/r 13.3 17.5 5.2 5.8 11.15 12.00 30.65 u/r 25.02 n/r 18.6 22.8 u/r 26.1 u/r u/r u/r u/r u/r u/r u/r u/r 53 21.0 12.8 n/r u/r u/r u/r u/r

n/a 22 n/a -5 27 2 n/a n/a 36 4 34 51 n/a -76 20 12 34 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a -9 -39 -36 -45 17 -37 -4 n/a 16 n/a -8 -16 n/a 7 n/a n/a n/a n/a n/a n/a n/a n/a -32 -24 -17 n/a n/a n/a n/a n/a

Rating u/r O/W u/r E/W O/W E/W u/r u/r O/W O/W O/W u/r u/r U/W O/W O/W O/W n/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r u/r n/r O/W U/W U/W U/W O/W E/W O/W u/r O/W n/r E/W U/W u/r O/W u/r u/r u/r u/r u/r u/r u/r u/r U/W E/W E/W n/r u/r u/r u/r u/r

11

Equities

Figure 5: RTS Index futures performance Close $ 141 735 141 740

VEZ9 VEH0

Change % -0.53 -0.88

Maturity Dec 09 Mar 10

Source: Bloomberg

Figure 6: Equity futures performance Close $ 635 607 180 680

GAZP-12.09 LKOH-12.09 SBER-12.09 RTKM-12.09

Change % -0.12 0.09 -0.40 0.00

Volume $/1000 7 758.02 2 427.08 233.63 11.43

Delivery 15.12.2009 15.12.2009 15.12.2009 15.12.2009

Source: Bloomberg

Figure 7: Major macroeconomic parameters Hard currency reserves Monetary base (M0) R/$ exchange rate Inflation, M-o-M

Unit

Current

YTD, %

$ bln R bln R/$ %

423.4 4 803.7 28.7007 0.0

-0.9 -13.9 -2.4 8.1

Source: Reuters

Figure 8: Major commodity prices Oil, $/barrel (IPE CIF Prices)

Close

Change

$

Previous close $

%

Change 3 months %

Brent, spot 1-month 3-month Urals WTI REBCO

77.83 77.95 79.45 77.43 79.28 77.05

77.24 77.50 79.04 76.77 79.05 76.63

0.8 0.6 0.5 0.9 0.3 0.5

6.6 7.0 7.2 8.4 14.2 8.8

Metals

Close

Gold, $/oz Platinum, $/oz Palladium, $/oz Nickel, $/ton* Copper, $/ton* Zinc, $/ton

Change

$

Previous close $

%

Change 3 months %

1 120.5 1 380 350.0 16 850 6 540 2 158

1 117.4 1 371 344.0 16 825 6 530 2 137

0.3 0.7 1.7 0.1 0.2 1.0

18.3 11.2 28.4 -13.6 8.3 20.8

Source: Bloomberg, NYMEX; Note: N/A – not available; * - 3 months forward

Figure 9: Russian debt market Maturity

Sovereigns Russia-10 Russia-18 Russia-28 Russia-30 MinFins MinFin-11

Next Coupon coupon rate payment %

Closing Change price

YTM

Spread over RFR

Issue volume

%

%

%

%

Years

bpts

mln

Currency

03/31/10 07/24/18 06/24/28 03/31/30

03/31/10 01/24/10 12/24/09 03/31/10

8.3 11.0 12.8 7.5

102.6 141.1 173.4 113.1

-0.01 0.04 -0.03 0.50

2.3 5.1 6.1 5.4

8.0 7.8 7.4 6.6

0.4 6.2 9.6 11.7

148.1 213.4 261.8 188.1

328 3 466 2 500 1 995

USD USD USD USD

05/14/11

05/14/10

3.0

99.5

-0.04

3.3

3.0

1.5

250.5

1 750

USD

Source: Reuters; Note: N/A – not applicable

12

Current Duration yield

The Morning Brief November 12, 2009

Equities

Figure 10: Comparative valuation table ticker Oil & Gas Gazprom Novatek

Recc

TP $

OGZD LI NVTK LI

MCap

EV

$ mln

$ mln

EV/ EBITDA 2009F 2010F

150 386 185 860 17 762 18 526

Russia gas wght avg

Rosneft* Lukoil* Surgutneftegaz* TNK-BP Gazpromneft Tatneft* Alliance Oil

ROSN LI LKOD LI SGGD LI TNBP RU GAZ LI TATN RX AOIL SS

E/W O/W O/W

8.2 74.2 12.0

91 144 109 687 51 629 57 651 33 761 18 141 28 683 31 576 24 712 27 442 10 513 11 128 2 410 2 796

E/W

5.0

KMG LI

O/W

27.7

10 245

6 606

INTE LI EDCL LI O2C GR

O/W O/W O/W

4.5 18.2 € 8.9

598 2 570 € 361

757 2 383 € 346

52 346 23 275

-

Russia oil wght avg EM o&g wght avg DM o&g wght avg

KazMunaiGaz* OFS Integra* Eurasia Driling Company* C.A.T. Oil* Russia ofs wght avg Intl ofs wght avg

Banking Sberbank VTB

SBER RX VTBR LI

Russia banking wght avg EM banking wght avg

Steel Evraz* NLMK* Severstal* Mechel* MMK*

6.0 15.7 7.0 13.1 7.2 9.0 5.4 7.7 9.9 9.6 9.6 14.1 12.3 8.7

38.4% 41.9% 38.8% 28.9% 18.7% 40.9% 24.0% 21.7% 22.4% 25.1% 26.8% 29.6% 26.0% 30.6%

36.1% 44.1% 36.9% 30.0% 17.6% 40.1% 22.5% 22.6% 19.2% 27.2% 26.6% 29.7% 27.8% 39.1%

1.8 6.6 2.3 2.5 0.7 1.2 1.0 1.4 1.0 1.8 1.6 2.6 1.8 2.1

1.6 4.8 1.9 2.4 0.7 1.1 0.8 1.2 1.2 1.4 1.5 2.2 1.5 1.8

6.6 8.2 8.2 7.9 9.4

4.4 6.7 4.2 6.0 8.8

neg 17.3 94.4 26.8 20.5

22.3 13.4 9.6 14.6 19.2

13.2% 21.8% 18.4% 20.0% 30.6%

15.9% 22.2% 28.0% 21.7% 30.2%

0.9 1.8 1.5 1.6 2.7

0.7 1.5 1.2 1.3 2.5

P/BV 2.2 1.4 1.9 2.5

1.9 1.4 1.7 2.2

119.5 neg 117.8 18.1

17.1 neg 17.1 13.8

-

-

-

-

0.9 3.7 1.2 5.0 3.0 2.4 4.5 4.0 1.8 9.0 4.0 20.8 16.4 8.3

52 84 55 146 75 38 55 82 57 135 95 341 215 84

$/oz 160.9 357.0 1173.7 95.4 390.1 323.1

$/oz 9760.2 6568.6 10848.6 1683.9 9254.1 6746.6

18 929 18 768 12 299 14 037 8 746

13.0 14.6 21.2 16.7 8.6 14.6 12.0 14.7

7.2 8.3 7.2 7.3 5.8 7.3 7.3 8.6

neg 46.8 neg neg nm 46.8 25.9 35.7

42.2 16.8 nm 17.5 22.0 24.0 14.2 36.8

15.9% 22.2% 5.2% 16.7% 23.4% 17.7% 17.6% 9.2%

23.5% 28.7% 12.4% 26.9% 23.2% 24.0% 23.5% 11.5%

2.1 3.2 1.1 2.8 2.0 2.4 2.0 1.0

1.7 2.4 0.9 2.0 1.4 1.8 1.7 0.9

MNOD LI ENRC LN KAZ LN

O/W E/W U/W

13.3 850p 572p

27 927 19 703 11 452

30 606 18 483 12 832

9.2 12.1 27.2 11.2 39.5 41.1 10.6

8.2 8.5 17.1 7.5 17.2 13.4 8.8

17.5 17.4 57.1 24.7 59.2 n/a 21.6

15.8 13.9 24.6 14.8 42.2 36.7 16.8

35.4% 39.9% 16.2% 41.5% 19.3% 6.5% 38.0%

35.9% 41.4% 21.2% 46.1% 23.6% 16.4% 41.9%

3.3 4.8 4.4 4.4 4.3 2.8 4.1

3.0 3.5 3.6 3.3 4.1 2.3 3.7

O/W 30.65 O/W 11.15 O/W 1509p

12 326 3 311 3 923 476

12 358 3 582 4 077 300

22.3 12.9 18.4 4.6 19.6 14.3

16.9 10.8 11.1 3.7 14.4 10.7

41.1 19.2 26.2 9.3 33.8 36.5

30.2 16.6 15.8 9.0 24.6 25.0

45.6% 49.4% 51.0% 41.5% 47.2% 43.3%

44.3% 47.8% 56.0% 43.9% 47.1% 47.3%

10.2 6.4 9.4 1.9 9.2 6.4

7.5 5.2 6.2 1.6 6.7 5.2

O/W O/W

23 60

21 138 19 925

26 848 23 501

6.3 6.3 6.3 5.7 5.8

5.8 6.1 5.9 5.2 5.6

14.7 14.7 14.7 12.0 11.9

12.9 11.3 12.1 11.2 10.9

48.0% 45.7% 46.9% 47.3% 35.0%

47.4% 44.1% 45.8% 46.3% 34.8%

3.0 2.9 3.0 2.6 2.0

2.7 2.7 2.7 2.3 1.9

E/W 0.02 U/W 0.008 U/W 0.052 O/W 0.071 O/W 0.061 E/W 0.022 O/W 0.134 O/W 0.00051

1 155 1 081 2 348 2 486 2 757 877 3 899 1 851

1 382 1 213 582 1 614 3 022 821 4 078 1 985

17.9 neg 15.5 11.3 16.7 11.4 15.5 13.8 14.8 14.1 11.2

8.3 15.9 28.6 3.3 8.1 3.6 8.6 5.8 10.4 12.1 8.1

neg neg neg 19.6 50.4 neg neg 128.3 59.9 25.3 17.7

neg neg nm 6.2 16.4 13.5 53.8 15.1 26.1 20.2 14.8

5.9% n/a 4.3% 11.0% 16.0% 6.6% 8.1% 12.4% 9.7% 33.9% 19.1%

10.6% 5.7% 2.1% 25.9% 24.5% 16.4% 12.0% 21.3% 15.6% 33.9% 25.7%

1.1 1.1 0.7 1.2 2.7 0.7 1.3 1.7 1.4 4.5 2.0

0.9 0.9 0.6 0.8 2.0 0.6 1.0 1.2 1.1 4.0 2.0

EV/IC, $/kW 145.0 139.5 69.6 187.1 348.5 90.7 366.8 316.2 243.3 1633.8 1363.5

$/MWh 27.6 25.2 18.1 29.8 78.7 24.1 64.0 76.2 48.9 295.5 319.7

10 192

9 352

7.3 10.4 8.2

6.0 7.6 7.3

18.8 19.0 14.3

15.2 11.8 14.9

36.6% 52.1% 24.5%

38.8% 53.3% 26.2%

2.7 6.5 2.0

2.3 4.6 1.9

369.1 1620.5 1807.3

113.6 294.3 512.4

VIP US MBT US

Russia mobiles wght avg EM mobiles wght avg DM mobiles wght avg

OGK1 RX OGK2 RX OGKC RX OGK4 RX OGKE RX OGK6 RX MSNG RX TGKA RX

Russia Thermal gencos wght avg EM Thermal gencos wght avg DM Thermal gencos wght avg

Hydro generation RusHydro*

6.8 26.0 8.8 12.4 6.4 7.4 6.3 9.0 7.2 12.5 9.1 17.5 17.9 7.3

11 174 17 296 8 203 9 632 9 129

Russia gold&silver wght avg Intl gold&silver wght avg

Thermal generation OGK-1* OGK-2* OGK-3* OGK-4* OGK-5* OGK-6* Mosenergo* TGK-1*

4.5 10.9 5.1 8.0 4.3 2.8 3.7 5.2 6.2 5.2 5.6 7.5 5.0 4.6

EV/ Prdtn

22.8 17.5 5.2 18.6 5.8

PLZL LI PMTL LI POG LN HGM LN

Mobiles VimpelCom* MTS*

4.7 15.8 5.9 8.7 3.9 3.0 4.3 6.3 4.5 7.3 5.9 8.7 6.6 6.9

EV/ Rsvs

U/W U/W U/W E/W U/W

Intl Base metals wght avg Intl PGM wght avg Intl Aluminium wght avg Intl Diversified wght avg

Gold & Silver Polyus Gold* Polymetal* Petropavlovsk* Highland Gold

EV/ Sales 2009F 2010F

EVR LI NLMK LI SVST LI MTL US MMK LI

Russia steel wght avg EM steel wght avg DM steel wght avg

Base Metals Norilsk Nickel* ENRC* Kazakhmys*

P/E EBITDA margin 2009F 2010F 2009F 2010F

HYDR RX

EM Hydro gencos wght avg DM Hydro gencos wght avg

O/W

0.051

The Morning Brief November 12, 2009

13

Equities

Retail and Consumer X5 Retail Group* 7th Continent Magnit* Dixy*

FIVE LI SCOH RX MGNT LI DIXY RX

E/W

21.0 12.8 6.3

7 487 674 6 410 608

8 401 1 039 7 597 883

E/W E/W

WBD US

U/W

53.0

3 410

3 697

URKA LI SILV RX AKRN RX

O/W O/W O/W

26.07 908 43.72

10 325 5 464 1 396

10 512 7 336 1 642

Russia Retail wght avg EM Retail wght avg DM Retail wght avg

Wimm-Bill-Dann* EM Dairy wght avg DM Dairy wght avg

Fertilizers Uralkali* Silvinit* Acron*

Russia Fertilizers wght avg Asian Fertilizers wght avg Global Fertilizers wght avg

11.0 8.0 14.7 7.7 9.9 12.7 8.0 12.3 12.0 10.5

8.8 7.0 10.8 5.7 7.5 10.9 7.3 10.9 10.5 10.1

27.3 31.6 24.5 20.9 23.4 22.4 16.1 25.6 21.0 17.3

18.8 14.5 18.8 12.8 15.5 20.7 14.5 20.2 17.5 16.3

8.8% 9.1% 9.2% 5.9% 7.3% 9.1% 6.9% 13.6% 13.7% 17.2%

8.8% 8.6% 9.2% 6.4% 7.6% 9.3% 7.2% 14.1% 14.0% 17.2%

1.0 0.7 1.4 0.5 0.8 1.2 0.6 1.7 1.5 1.8

0.8 0.6 1.0 0.4 0.6 1.0 0.5 1.5 1.4 1.8

18.6 9.6 6.2 13.9 15.5 15.0

9.4 6.4 4.2 7.7 10.9 9.8

31.7 14.1 9.4 23.6 26.8 24.5

13.9 7.2 6.0 10.8 17.9 15.6

53.9% 70.5% 24.5% 53.7% 23.7% 29.7%

58.0% 68.3% 28.0% 56.0% 22.8% 35.0%

10.5 6.5 1.5 7.8 2.1 4.7

6.3 4.4 1.2 4.9 1.8 3.5

*Alfa forecasts Source: Alfa Research, company data, Bloomberg Consensus Estimates

Kazakhstan Equities

14

The Morning Brief November 12, 2009

Equities

CALENDAR Figure 11: Russian corporate events calendar November 12-13

Fertilizers

Silvinit 3Q09 RAS results (estimated)

November 12

Telecoms

MTS 3Q09 IFRS financials

November 13

Oil & Gas

Novatek 3Q09 IFRS financials

Fertilizers

Uralkali 3Q09 RAS results (estimated)

November 16

Metals & Mining

Evraz 3Q09 interim management statement

November 17

Telecoms

Comstar 3Q09 US GAAP financials

Real Estate

AFI Development 3Q09 IFRS financials

Real Estate

MirLand Development 3Q09 IFRS financials

November 18 November 23-27

Metals & Mining

NLMK 9M09 US GAAP financials (estimated)

November 25

Telecoms

VimpelCom 3Q09 IFRS financials (estimated)

Oil & Gas

Rosneft 3Q09 US GAAP financials

Banking

Vozrozhdenie Bank 9M09 IFRS financials (estimated)

Consumer & Retail

X5 3Q09 IFRS results (estimated)

November 30

Source: Bloomberg, Alfa Research

Figure 12: International macroeconomic calendar November 12

US DOE US Crude Oil Inventories MBA Mortgage Applications Initial and Continuing Jobless Claims October Monthly Budget Statement Eurozone ECB Publishes November Monthly Report Industrial Production

November 13

US September Trade Balance October Import Price Index University of Michigan Confidence Eurozone October CPI 3Q09 A GDP

November 16

US October Advance Retail Sales November Empire Manufacturing September Business Inventories Eurozone October CPI

November 17

US October PPI September Net Long-term and Total Net TIC Flows October Industrial Production October Capacity Utilization November NAHB Housing Market Index Eurozone September Trade Balance

November 18

US DOE US Crude Oil Inventories MBA Mortgage Applications October CPI October Housing Starts October Building Permits Eurozone September Current Account September Construction Output

November 19

US Initial and Continuing Jobless Claims October Leading Indicators November Philadelphia Fed.

Source: Bloomberg, Alfa Research

The Morning Brief November 12, 2009

15

Contact Information Alfa Bank (Moscow) Head of Equities Telephone Research Department Telephone Oil & Gas Macroeconomics Banking Telecoms, Technology, Internet, Media Utilities Metals & Mining Consumer Goods, Retail, Real Estate Transportation, Fertilizers, Machine-Building Russian Product Editorial Translation Production Equity Sales & Trading Telephone Facsimile International Domestic Institutional Alfa-Direct Sales Team

(+7 495) 795-3676 Chirvani Abdoullaev, CFA, Alexander Bespalov Natalia Orlova, Ph.D. Natalia Orlova, Ph.D., Leyla Sharifullina Elena Mills, Ekaterina Balykina Alexander Kornilov, Ph.D., Elina Kulieva, Ph.D. Barry Ehrlich, CFA, Maxim Semenovykh, Sergei Krivokhizhin, Ph.D. Elena Mills, Vitaly Kupeev Georgy Ivanin Angelika Henkel, Ph.D., Vladimir Dorogov David Spencer, Heather Dean Anna Sholomitskaya, Elena Elovskaya Aleksei Balashov

(+7 495) 223-5500, 223-5522 (+7 495) 745-7897 Isai Pochtar, Michael Kotov, Roland Glasfors Dmitry Soloviev, Dmitry Demchenko, Mikhail Babaev (+7 495) 795-3680 Sergey Rybakov, Valeriy Kremnev, Evgeniy Batelman th

77-a Chervonoarmiyska St.(6 floor) Kiev, Ukraine 03150

Alfa Capital (Kiev) Research Department Telephone Facsimile Analysts Equity Sales & Trading Sales Trading Telephone

(+380 44) 490-1600 (+380 44) 490-1601 Denis Shauruk, Oleh Yuzefovych Sergey Grigorian, Ivan Shehavtsov, Denis Dolmatov (+380 44) 490-1600

Alfa Capital Markets (London) Telephone Facsimile Telephone (Sales & Sales Trading) Sales Sales Trading

Alforma Capital Markets (New York) Telephones Facsimile Sales Sales Trading Fixed Income Sales

12 Akad. Sakharov Prospect, Moscow, Russia 107078 Michael Pijiolis (+7 495) 795-3712

City Tower, 40 Basinghall Street, London, EC2V 5DE (+44 20) 7588-8500 (+44 20) 7382-4170 (+44 20) 7382-4175 Julia Dawson (+44 20) 7382-4174 Douglas Babic (+44 20) 7382-4178 Mark McCracken (+44 20) 7382-4172 th

540 Madison Avenue, 30 Floor, New York, NY 10022 (+1 212) 421-7500 (+1 212) 421-8633 Robert Kaplan, George Kogan Roman Kogan Jeffrey Weichsel

Copyright Alfa Bank, 2009. All rights reserved.

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