August 1998
18 August
CentreInvest's Research Department released its latest report entitled "Russian Market
Strategy, August 1998." The report is intended to help investors select the best opportunities
on the Russian equities market. The report covers seven major sectors and provides detailed
information on twenty-three individual stocks. All recommendations are based on 1998 and long-term
performance projections. Oil companies and Gazprom, who are expected to benefit from the
rouble devaluation, are the main picks currently. Additionally, analysts believe these companies
will retain the capability to raise money via exports. However, under present economic conditions,
financing sources are likely to be limited to institutions already familiar with the companies.
Telecoms appear less attractive now, although, as discussed in the report, ceteris paribus,
telecoms are more interesting than energos or most manufacturing companies.
14 August
Leading Russian brokerage firms announced the creation of a non-profit
association called "Financial Council of Russia," to improve the image of the Russian
financial market. Burson-Marsteller, a western public relations firm will act
as consultant to the Council. CentreInvest Group is participating in the new association,
as well as Troika-Dialog, CS First Boston, MFK Renaissance, Rinaco Plus, ATON,
the National Reserve Bank, the United Financial Group and ABN AMRO.
July 1998
30 July
Results of the RTS Partnership Board session, held by correspondence from June 16 through July 16,
have been finalised. Four representatives, ATON, Olma, CentreInvest Securities and
the Bank of Moscow, were elected to the RTS Board of Directors.
New members were chosen by an RTS third category vote, which means any individual
can nominate potential candidates.
21 July
The CentreInvest Group is pleased to announce the following appointments:
Albert Aleynikov has joined CentreInvest, Inc. in New York as Vice President
of Equity Sales. Mr. Aleynikov brings with him five years of Wall Street experience,
including time with Mitsubishi Bank New York. Eric Withers has been appointed Vice-President
of Equity Sales at CentreInvest Securities in Moscow. Mr. Withers has over five years▓ experience
working in leading US investment houses such as Merrill Lynch and Prudential Securities.
Maxim Ponomarev has joined CentreInvest Securities in Moscow as an Equity Sales Associate.
He has been working in the Russian financial markets for the past five years.
6 July
The CentreInvest Group is pleased to announce the following appointments:
Alexander Babian has been appointed managing director of CentreInvest Capital
management and portfolio manager of the CentreInvest Russia Fund. Babian replaces
James Fenkner, who is no longer with CentreInvest Group.
June 1998
17 June
Igor Tsukanov, president and CEO of the CentreInvest Group, announced today that CentreInvest Inc.,
the Group▓s division in the United States, is now licensed and ready to commence investment banking
and securities trading operations in the U.S. financial market. Тhe registration with the Securities
and Exchange Commission (SEC) and membership in the National Association of Securities Dealers (NASD)
will allow the company to offer services to US and international clients, including trading
and corporate and government securities, conducting private placements and advisory work for
mergers and acquisitions. "The commencement of full sales, trading, and advisory operations
of CentreInvest Group's US company will not only the open the door for further US involvement
in Russia's financial markets, we expect that CentreInvest Inc. will also act as a gateway
for Russian investors interested in the US debt and equity markets," said CentreInvest Group
President Tsukanov. "Our immediate goal is to establish relationships with the institutional
investment community in the United States," said CentreInvest Inc. CEO Vasiliy Sofiyskiy.
"We are ready to offer them a wide range of high quality financial services and products,
including research and execution capabilities, and plan to work closely with our CentreInvest
affiliates in Russia, Ukraine, England, and Israel to address the investment needs of our clients
in those markets."
May 1998
20 May
CentreInvest Group entered the Group of Twenty, a group of companies that reports
financial information to the Federal Securities Commission. The Group hopes to prevent
non-deliveries and non-payments crises such as the crisis that affected the OTC
derivatives market earlier this year and the current Russian exchange market crisis.
Major financial institutions, such as Troika-Dialog, Rinaco Plus, Brunswick Warburg,
ATON, CentreInvest Securities and OLMA, are participating in the Group of Twenty.
April 1998
14 April
The CentreInvest Group is pleased to announce the following appointments.
As of the first quarter of 1998, Dan Rapoport and Igor Grossman have been
made partners of CentreInvest Group. In addition, Eva Pregon has joined
the equity and fixed income sales team, Victor Zabavsky has joined the
research department and Evgeny Kogan will head up the new Financial Products
department.
6 April
CentreInvest Soft received confirmation that a partnership agreement
between the Russian company CentreInvest Soft and American company Oracle
had been signed. In accordance with the agreement, CentreInvest Soft will
become a business partner of Oracle. The partnership relations were
established in order to promote Oracle products on Russian market.
The agreement provides CentreInvest Soft with additional possibilities for
further developing and improving its software and solutions.
March 1998
31 March
CentreInvest Soft, part of CentreInvest Group, signed a partnership
agreement with Interface Ltd, distributor for Logic Works and Rational
Software (USA). The agreement outlines forms and methods of co-operation
between the two companies in their efforts to market the US company's
software in Russia. According to specialists at CentreInvest Soft, this
partnership will help CentreInvest Soft significantly improve the quality
of its software and reduce production time.
28 March
CentreInvest's Research Department released its latest report
entitled Kovdorsky GOK: From Fearful Trip - the Victor Ship? The
report presents one of the most interesting Russian GOKs, or mining
companies. Unlike most other GOKs which produce only iron ore concentrate
and are in hot water due to the non-payments crisis and the stagnation of
the domestic steel industry, Kovdor has wisely diversified into high-quality
baddeleyite and apatite which enjoy stable foreign demand. The report
gives prominence to management strategy which is crucial to the survival
and success of Russian companies. The GOK has made good use of its small
means by concentrating on projects aimed at increasing lucrative exports.
Exports are also a source of cash which should help the GOK resolve its
one serious problem - heavy tax arrears.
24 March
Igor Tsukanov, president and CEO of CentreInvest Group, announced
today a strategic alliance with Africa-Israel Investments Ltd., an Israeli
company closely linked to Bank Leumi. Mr. Tsukanov stated, "Our relationship
will allow CentreInvest to access new markets, raise new capital, and
provide a wider range of services to our clients. In turn, our partner
expects to use CentreInvest as a primary vehicle for investment projects in
Russia and the CIS." Under the terms of the agreement, Africa-Israel
Investment Ltd. Will acquire a 20% stake in CentreInvest Group
for US$9.5 million.
17 March
CentreInvest's Research Department released its latest report entitled
Rosneft subsidiaries: Pets and Brats. The report describes Rosneft's
numerous subsidiaries, with special emphasis on the most prized and
liquid among them, Purneftegas and Sakhalinmorneftegas. Smaller production
subsidiaries located in the South of Russia are also well covered. Since
Rosneft is unlikely to remain an independent company after the tender
that will run from xx to xx, the report which analyzes possible synergies with
each bidder may be useful for those who assess the chances of the tender
participants.
February 1998
27 February
Today a delegation from the Koryak Autonomous Province of Russia returned
from a visit to the Province of British Columbia. The delegation was invited
by the Canada-Russian Pacific Chamber of Commerce to visit the region from
February 21-25, 1998. The delegation was led by the governor of the region,
Ms. V.T. Bronevich. The fishing industry was represented by the leading
company Iyanin Kutkh, which is undertaking measures to attract long-term
financing on the international market. The CentreInvest Group serves as the
investment advisor to the company. Numerous presentations and meetings were
held in the business community, including meetings at the stock exchange,
a fish processing plant and a construction company with the aim of building
a favourable investment image for Iyanin Kutkh and the KAR as a whole.
10 February
CentreInvest's Research Department released its latest report entitled
Yakutskenergo (YE): Value in the Cold Climate. The report outlines
the major benefits and risks of Yakutskenergo, an electric and heat
generating utility in the Russian Republic of Sakha. The company's
unique assets, low costs, location in a fast-growing region and numerous
links to other energy producers will give it a strong competitive position
when and if the Far Eastern market is liberalised. This is a big if and
a bigger when, and possible deregulation delays somewhat tarnish the
company's prospects, making us rate the stock as a HOLD.
3 February
On January 30 an extraordinary shareholder meeting of OAO Chelyabinsk Tractor Plant was held. The shareholders voted for the transfer of executive authority to ZAO ChTZ Holding and the liquidation of OAO Chelyabinsk Tractor Plant. Furthermore, they approved a restructuring programme, whereby the main production assets will be transferred to the subsidiaries. Shares in OAO Chelyabinsk Tractor Plant will be converted into the shares of the newly created subsidiaries. , CentreInvest Securities was selected to act as a financial advisor to advise on the development of a scheme for converting shares in OAO Chelyabinsk Tractor Plant into the shares of the subsidiaries, as well as to identify further steps for restructuring the enterprise.
January 1998
22 January
NAUFOR's Committee for Certification of Commercial Programmes declared
the StockOffice System, developed by CentreInvest Soft, to be in compliance
with NAUFOR's internal accounting standards for recording securities
transactions. The StockOffice System was designed to computerise the
recording of transactions with corporate securities and became the first
programme in Russia to receive full NAUFOR Certification. Since the first
installation of StockOffice in January 1997, the system has actively been
used in over 30 capital markets organisations in Moscow, St Petersburg,
Nizhny Novgorod, Omsk, Rostov-on-Don and Surgut. The StockOffice System
was developed using advanced technology and the latest products of leading
manufacturers. The programme uses "client-server" technology and is based
on MS Windows NT and SQL. System upgrades do not violate database security
and do not require additional procedures before being put into operation.
All market transaction reporting forms can be exported in MS Excel format.
December 1997
CentreInvest has been appointed by RAO UES of Russia as financial advisor,
responsible for arranging the placement of 49.5% of Pskov Thermal Power
Station shares and 6% of Bogouchanskaya Hydro Power Station shares.
This is the first major project launched by RAO UES of Russia under a
long-term asset-restructuring programme. The Pskov TPS shares are expected
to be sold through an international tender in March 1998.
The date of the tender for Bogouchanskaya HPS shares will be determined later.
CentreInvest Group prepared an investment memorandum and developed
a financing strategy for the completion of Novosibirsk TPS-6 for
Novosibirskenergo. The project included an analysis of the industrial,
economic, social and ecological aspects of the construction of TPS-6;
development of an economic model: calculation of financing streams,
valuation of the attractiveness and reliability of the project
(risk analysis); analysis of the financing options and preparation
of recommendation on the optimal financing structure. CentreInvest
consultants presented this project to the company management, regional
authorities and leading financial institutions in the region, as well
as to regional press and information services.
24 December
CentreInvest's Research Department released its latest report
entitled "Eastern Oil Company (EOC): Yoked By Yukos?" EOC shares did well
in 1997, soaring from $0.25 in January to over $2.00 in October. EOC's
advantageous location and strong presence in petrochemicals and gas
production make it a unique investment opportunity among Russian oil
holding companies. However, given the company's dependence on YUKOS
the stock does not deserve more than a HOLD recommendation. Two major
factors which can affect the outlook for EOC are the outcome of the impending
tender auction for 34% of the company and, until it is held, the government's
decision, as the second largest shareholder, on whether to approve EOC's
merger with, or conversion into, YUKOS.
November 1997
26 November
Mr. Igor Tsukanov, President of CentreInvest Securities, announced the
launch of The CentreInvest Russia Fund, a USD$150 million fund dedicated
primarily to Russian equities. He stated, "The CentreInvest Russian Fund is
designed to help sophisticated individual and institutional investors to take
full advantage of investment opportunities in Russia and the CIS. The Fund's
goal is to achieve superior performance through an aggressive unique
research-driven investment policy." The CentreInvest Russia Fund will be
managed by James Fenkner, formerly Director of Research at CentreInvest
Securities. The CentreInvest Russian Fund is a newly organised Cayman
Islands domiciled company. The Fund Manager will be CentreInvest Capital
Management (Bermuda) with assistance from CentreInvest Capital Management
Russia. The Fund's investment objective is to achieve capital appreciation
and long term capital growth by investing primarily in both liquid, and less
liquid "second tier", equity, equity-related and debt securities of corporate
and government issuers in the Russian Federation, other republics of the
former Soviet Union (NIS countries) as well as investments in futures,
options and other types of derivatives.
26 November
CentreInvest Group of Russia and Robert Fleming & Co. Limited of the
United Kingdom, who were financial advisors to Uralmash Zavody, were very
pleased that the successful placement of Uralmash Zavody shares was
unaffected by the recent market volatility. The tender for shares in
OAO Uralmash Zavody closed on October 24, 1997, successfully raising
USD$38.79 million. This was the first international placement in the
Russian heavy machinery industry and has pioneered the newly-issued Russian
share offers on the international financial markets. Unlike most
international placements of Russian company stock, the OAO Uralmash Zavody
placement was made on the Russian exchange without the use of depository
receipts.
12 November
Igor Tsukanov, President of CentreInvest Securities, announced that the
firm has expanded with recent office openings in London, New York and Kiev.
"We expect that the New York and London offices will allow us to cover our
institutional investors in a more timely and efficient manner. The move into
Kiev came as a natural progression in our search to provide our more
aggressive clients with new investment opportunities." CentreInvest Inc.
(USA) of New York is headed by Vasily Sofiyskiy, who has worked on the
Russian and US stock markets for the past eight years. CentreInvest
Securities' office in London is headed by Lucien Dautresme, who has
25 years' experience in commercial banking, corporate finance, project
financing and asset management. The CentreInvest office in Kiev (Ukraine)
is headed by Piotr Kochevrin, who has worked on the Russian market for
almost five years.
═
October 1997═
CentreInvest experts implemented a "Budget and finance planning system"
and an "Accounts payable and receivable analysis" in Yuganskneftegas.═ As
part of the project "Budget and finance planning system", we carried out
an analysis of the information flow between "YNG" divisions and installed
the software system NEFRIT.═ The company was able to conduct a financial
and investment analysis of its activities, including a database of planning
and reporting┘ forms with access from several working places, computerized
consolidation of reports provided by the divisions, departments and the
company as a whole, as well as data export/import to Excel.═
CentreInvest, as part of a consortium with International Mining Consultancy
and Rossisskiy Credit, won a TACIS tender for an enterprise restructuring
project.═ The project will extend for 2 years, during which time it is estimated
that 15 enterprises will be restructured.═ The maximum budget for the project
in the framework of the TACIS program is ECU 6.5m.═ The project's overall
aim is to create economically strong and stable companies.═ The more focused
task lies in providing assistance to the enterprises in areas such as strategic
planning, marketing, corporate finance, accounting, auditing, etc.═ The
needs of the enterprises taking part in the program will vary, therefore
CentreInvest's consultants will consider each company's specific demands
individually.═ Consulting services provided by the consortium will include
both "soft" restructuring with or without capital expenditure, and "hard"
restructuring, requiring large investment.═
30 October
CentreInvest Group presented a business plan outlining the project
for attracting finance to Novosibirskenergo.═ The business plan included
detailed market research of the energy and heat resources in Russia and
the region, an analysis of the production, social and ecological aspects
of construction, and an in-depth analysis of the efficiency of the project.═
It is expected that after the presentation an agreement will be signed
on future cooperation between Novosibirskenergo and CentreInvest, which
will name CentreInvest as the Consultant to arrange the financing.═ In the
course of the project, different types of financing structures will be
developed and analyzed, a group of potential investors will be defined,
necessary documents will be prepared and final transactions organized.═
28 October
Alexander Babian, Managing Director of the CentreInvest Group announced
today that CentreInvest has been appointed financial advisor to the
Chelyabinsk Tractor Factory. As financial advisor to the company,
CentreInvest was responsible for listing the company on the Russian
Trading System RTS-2 trading network. The ChTZ symbol appeared for the
first time yesterday on trading screens across Moscow. Under the terms
of the agreement, CentreInvest will also advise the company on an upcoming
American Depository Receipt (ADR) programme which is expected to be
executed in mid-1998. Chelyabinsk Tractor Factory is one of Russia's largest
tractor factories, producing over 1,324 tractors in 1H1997. It expects
to produce 3,600 tractors this year. In 1996, the Factory showed a profit
of USD $7.83 million on sales of USD $225 million. Chelyabinsk Tractor
Factory's customers include Russia's largest oil and gas companies,
the mining sector, and foreign export customers. Given the recent news
that Gasprom is expected to become an investor of ChTZ shares, the risks
of share dilution and ChTZ's rumoured bankruptcy have become more remote.
24 October
CentreInvest's Research Department released its latest report entitled
"LEARNING TO LEND: An overview
of the Russian Banking Sector with 10
Profiles of Individual Banks". The report outlines the specific
characteristics of the Russian banking system and details the relative
attractiveness of Russian banks. With its significant growth potential,
access to cheap foreign capital, and undervalued equity holdings, the
Russian banking sector appears attractive. However, illiquidity, potential
dilutions and lower future profitability may dampen the enthusiasm for
bank stocks. The piece also profiles ten of the largest and most liquid
Russian banks.
22-23 October
Sachs Associates and Bloomberg hosted the Third Annual Russian Capital
Markets & Investor conference in Moscow, which was co-sponsored by
the CentreInvest Group.═ Alexander Pavlov, CentreInvest's Head of Research,
delivered the company's report, General Regional Overview, alongside
of which several company presentations were held, including Dalmoreproduct,
Yakutskenergo and Primorsk Shipping Corporation, which outlined each company's
economic position and assessed development prospects═
8-17 October═
The CentreInvest Group, in conjunction with R. Flemings & Co. Ltd,
advised Uralmash Industries on its share placement, and arranged and conducted
the company's international road show.═ The road show was part of the program
to place 95.5% of the 4th share issue (22.4% of the authorized capital)
of Uralmash Industries, one of the largest mining equipment manufacturers
in the CIS.═ During the roadshow, meetings were arranged with over 70 institutional
investors in San Francisco, San Diego, New York and Boston (USA), Vienna
(Austria), Zurich, Geneva, and Basel (Switzerland), and London (UK).═ On
24 October the auction of Uralmash's 4th share issue was held, which comprised
4,299,253 shares.═ All shares were successfully placed with foreign investors.═
6 October═
CentreInvest's Research Department released its latest report entitled
"The Russian Equity
Market: Your Guide to Evolution".═ Applying market Darwinism to
a body of economic data, the research tracks and predicts the development
of the Russian market through three economic ages: from 1994 to the first
half of 1996; from second half 1996 to 1997; and from 1997 to 2000.═
═
September 1997═
September - October 1997═
CentreInvest has been working on a review of the Russian petroleum
logistics infrastructure, an area key to controlling costs and gaining
competitive advantage on international oil markets, and critical in a country
spanning the vast geographical area of the Russian Federation.═ The study
is being conducted under multi-client sponsorship to allow use of maximum
resources in producing an in-depth examination and interpretation of results.
For further information on this study, please click
here.
The CentreInvest Group devised an electronic information exchange system
for LUKoil.═ The system provides for online exchange of documents throughout
the company, replication and synchronization of databases maintained in
the company's divisions, as well as communication with external sources
of information, including those involving Internet technologies.═ Work on
the project was carried out in conjunction with Microsoft Consulting, whose
experts have called it one of the most impressive computerization efforts
in Russia.
September 1997═
CentreInvest Securities, the investment division within CentreInvest
Group, became an official RTS-3 market-maker.═ Now the company's traders
can carry out "on line" transactions with equities which do not feature
on other quoted lists.═
The CentreInvest Group installed a budgetary and financial planning
system in LUKoil's head office.═ This system makes it possible to draw up
and optimize annual budgets for the company's units, to produce a consolidated
budget, and to prepare various budget models responsive to possible external
changes such as prices, rate of inflation, tax policy, wage increases,
etc.═ The designed system shows how these factors can affect the company's
operations and performance.═ The "Drill Down" technology used enables data
presentation in any required degree of detail, from a consolidated budget
to a separate financial document.═
CentreInvest's expansive experience in designing customized software
enabled the company to release in a new accounting system for recording
government bond transactions that meets NAUFOR▓s requirements.═ The release
came only three months after NAUFOR▓s standards were made public.═ By September
1997 different versions of this program were running at 12 banks and
investment companies.═ According to the management of the finance and investment
company Cartel, after the introduction of this system the company successfully
brought its internal securities accounting system into compliance with
current regulations.═ The time spent on entering and processing a transaction
reduced 5-10 times, and it became possible to keep track of planned revenues
and assess the work of each individual trader as well as the securities
department as a whole.═
26 September═
Sachs Associates and Bloomberg hosted the First Russia-East Asia Investor
Forum in Hong Kong, which was co-sponsored by the CentreInvest Group.═ James
Fenkner, CentreInvest's Head of Research, delivered the company's report
"Focus on the Russian Far East", alongside of which several company
presentations were held, including Dalmoreproduct, Yakutskenergo and Primorsk
Shipping Corporation, which outlined each company's economic position and
assessed development prospects.═
23 September═
The Tretyakov Gallery hosted a party in commemoration of its patrons
and sponsors and dedicated to the 850th anniversary of Moscow.═ The director
of the Tretyakov Gallery, Mr. Rodionov, awarded CentreInvest with a Certificate
of Gratitude for its honorable contribution and support for the Gallery's
unique collection of Russian art.═ The CentreInvest Group has been the Gallery's
sponsor for a number of years.═ We have acquired two mayoliks by Vrubel,
An Assyrian and Sorceress, as well as the 17th century icon
God's Mother On the Altar.═
9 September═
CentreInvest's Research Department released its report entitled "PRISCO:
Your Ticket to Treasure Island".═ PRISCO (Primorsk Shipping Corporation)
is Russia's dominant oil carrier.═ Its already strong position in the Russian
Far East is likely to be buttressed further once the Sakhalin 1 and 2 sea
shelf development projects come on stream.═ Under these projects, the company
may become the main transportation agent, and by 2011 its revenue from
carrying Sakhalin oil may amount to $405m, or 63% of total revenue.═ The
passage to Treasure Island is likely to be fairly smooth, as the company's
young ships cut through liquid and transparent waters, with an ADR launch
scheduled for 1997-98.═
═
August 1997═
CentreInvest completed Phase One of a restructuring project for
Saratovgesstroy (Balakov, Saratovskaya Oblast) which constituted a
thorough diagnostics of the company. Our consultants identified the reasons
behind the current difficult economic position of Saratovgesstroy and prepared
a preliminary list of issues to be resolved. Thereafter CentreInvest began
working on the second phase of the project: developing specific recommendations
for the company to overcome the existing crisis.
═The CentreInvest Group, acting in a consortium with Coopers & Lybrand
and Rossiysskiy Credit, was informed that as a result of a highly competitive
tender it had been entered in the Register of Consultants under the Enterprise
Restructuring Services Project financed by the IBRD.═ Together with their
partners, CentreInvest's experts took part in a workshop organized by the
Russian Privatization Center to outline further work on the project.
29 August
CentreInvest's Research Department released a report entitled "Uralmash
Zavody:═ Marriage without Union". Uralmash Zavody is a recently
created holding company combining Uralmash, Russia's heavy═ engineering
giant, and ZSMK, a large metal assembly welding plant.═ While the new company,
with its IAS financial and ADR plans, is more transparent and liquid than
either of its components, it adds little to the operational strengths of
the two plants.═ These include Uralmash's 70-80% share of the metallurgical,
mining and drilling equipment markets, and ZSMK's efficient welding operations
and innovative management.
25 August
CentreInvest's Research Department released a report entitled "The
Russian Energy Sector:═ The Barons of Power".═ This report on the
medieval world of Russian energy companies offers you a panorama of energy
fields and profiles of 33 power barons that would grow richer by the day
if it were not for an array of problems that beset their baronial halls:═
the decline of the Russian economy, harsh regulations, an inequitable cross-subsidization
system, pervasive barter, and glaring inefficiencies.═ Yet the barons of
power are striking back, finding alternative markets, seeking to rebalance
tariffs, combating the cash crunch and ruthlessly eliminating inefficiencies,
while the government has ridden to their rescue by vowing to liberalize
the market by 2001.
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