Morning Brief

Desk Notes Published
Russia 2008: Growth Financed from the State
Coffers?
Ukraine: UniCredit Completes Ukrsotsbank
Acquisition
Equity markets
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1 900
1 800
Index
14 Nov 20 Nov 26 Nov 30 Nov 6 Dec 12 Dec 18 Dec 24 Dec 28 Dec 14 Jan 18 Jan 24 Jan
Source: RTS, MICEX, Bloomberg
RTS PFTS re-based KASE re-based
Ukrainian equity market chart, see p. 7
Kazakh equity market chart, see p. 10
Equity indices, currencies, commodities
Close Change 1 YTD 1
% %
Russian
RTS 1 988 5.1 -13.2
RTS-2 2 437 1.5 -7.3
RTX 2 697 5.7 -14.6
MICEX 1 662 5.8 -12.0
Ukrainian
KAC 20 19 911 4.0 -1.9
PFTS 1 127 3.3 -2.8
Kazakh
KASE_Shares 2 592 0.4 -1.7
Reuters ADR Index 331 1.2 5.6
International
MSCI Russia 1 338 5.6 -12.9
MSCI GEM 1 083 2.7 -13.0
DJIA 12 379 0.9 -6.7
S&P 500 1 352 1.0 -7.9
Shanghai Comp 4 786 1.4 -9.0
FTSE 100 5 876 4.8 -9.0
NIKKEI 225 13 629 4.1 -11.0
ASX 2 998 4.6 -8.8
ISE 100 45 011 5.8 -19.0
Bovespa 57 463 6.0 -10.1
R/$ Exchange Rates
CBR 24.6325 -1.0 0.4
SELT tomorrow 24.5991 -0.3 0.3
UAH Exchange Rates
UAH/$ 5.05 0.0 0.0
KAZ Exchange Rates
KAZ/$ 120.22 0.0 -4.7
$/Euro Exchange Rate 1.4734 1.2 0.1
Commodities
Brent, $/bbl 89.33 3.1 -4.9
Urals, $/bbl 87.27 3.1 -4.4
WTI, $/bbl 90.06 2.8 -6.2
Nickel, $/ton * 27 250 1.3 3.6
Copper, $/ton * 7 020 2.2 5.2
Gold, $/oz 911 -0.2 9.3
Palladium, $/oz 375 0.3 1.6
* - 3 months forward
Morning Brief
Top 6 Gainers: URKA $7.10 14.5% URSI $0.053 12.9% RASP $5.96 11.0%
RTKMP $2.27 10.8% MMBM $47.0 10.6% EVR $68.2 10.0%
Top 6 Losers: CHE $12.5 -9.1% RMG $24.6 -3.0% NNSI $4.65 -2.1%
SNGSP $0.50 -2.0% TGKJ $3.52 -2.0% SNOZ $91.0 -1.1%
Russian Market
Market Comment, p. 3
Paging Inspector Clouseau
Can we blame the French? That is the question being asked after yesterday’s shocking
announcement that Société Générale has suffered over €4.9 bln in losses from a single
rogue trader. SocGen’s top management found out about the massive fraud the
weekend prior to the sell-off, and the bank’s rapid unwinding of very large positions last
week may have, at the very least, exacerbated the sharp declines in Europe.
Top Stories
Macroeconomics: CPI Inflation reaches 1.8% in first three weeks
of year; NEGATIVE
CPI inflation reportedly reached 1.8% in the first three weeks of January, exceeding the
1.7% posted in January 2007. This figure suggests that January CPI growth will be at
least 2%.
Banking: Sberbank expected to post strong 9M07 IFRS, $3.25 bln
net profits
Today, Sberbank is expected to release 9M07 IFRS results, which we believe will be
quite strong.
Oil & Gas: Russian authorities drafting proposals to allow
undiscriminated access to gas transportation facilities;
NEUTRAL
Yesterday the Federal Antimonopoly Service (FAS) approved the draft version of an
order allowing undiscriminated access to gas transportation capacities.
Ukrainian Market
Market Comment, p. 7
PFTS bounces back
The PFTS Index followed world trends and bounced back by 3.3% on Thursday. Sizable
funds of free money chased seemingly undervalued stocks after four consecutive days
of corrections fueled market volatility.
Top Stories
Utilities: Dniprooblenergo increases net income by 40% in 2007;
POSITIVE
CEO Eduard Sokolovsky announced that Dniprooblenergo increased net income to
$5.5 mln, a 40% increase y-o-y.
Also: MMKI, SGOK, CGOK, PGZK, XXI Century
Kazakh Market
Top Stories, p. 10
Metals & Mining: Hambledon Mining back on track to achieving
2008 target output
Hambledon Mining has reported that the technical problems that arose at both of its
newly launched operations have now been resolved and the plants are working
normally.
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 page 18.

ALFA’S TOP PICKS
Ticker Target Price Upside to Target Investment Rationale
Equities
RUSSIA
Gazprom GAZP $22.0 76% We think Gazprom is currently the best play among the Russian oil & gas
producers, and believe it is seriously undervalued. Gazprom will benefit
disproportionately from higher international oil prices and upcoming steep
domestic gas price increases, the latter sorely needed to dampen rampant
domestic demand. The Street has been behind the curve on long-term oil prices,
and it is now behind the curve on Gazprom’s long-term business prospects. We,
however, have raised our Gazprom target price to $22.0/share and make it our top
pick in the Russian oil & gas universe.
VimpelCom VIP $50 46% We see VimpelCom as the most attractive Russian telecom stock. The acquisition
of Golden Telecom, a leading Russian fixed-line provider, will directly add $1 bln to
VimpelCom, as we value Golden at $129 per share vs. the $105 offered. It will also
bring VimpelCom an additional $3.4 bln in synergies and exposure to the growing
consumer broadband story, which is going to be a key driver in pushing
VimpelCom’s value higher in the coming months. Regional broadband will surprise
on the upside, increasing by at least 120% by 2010.Our new assumptions result in
2008E revenue of $11.4 bln and EBITDA of $5.8 bln, which are 10% and 18%
higher than the combined market consensus for VIP and GLDN.
Integra INTE $21.5 64% The Russian OFS industry is entering a period of strong secular growth fueled by a
number of long-term trends specific to the Russian oil industry. Integra is
excellently placed to capitalize on these factors with an aggressive, well-balanced
management team; a large asset base and experienced workforce to support its
further expansion; and relatively significant financial resources at management’s
disposal. The current '07 EV/EBITDA multiple of 10x is on par with that of global
peers, but taking into consideration Integra's very rapid growth (EBITDA tripled yo-y
in 1H07) we believe the stock trades at very attractive levels.
Aeroflot AFLT $4.88 35% As Russia’s national carrier, Aeroflot benefits from bilateral agreements with
international markets and receives all of the country’s estimated $300 mln in
annual flyover fees. Synergies from joining SkyTeam will increasingly improve the
business through route optimization and booking strategies such as code sharing
between members. In a tight market for planes and staff, Aeroflot has an
advantage over its smaller, less prestigious players. In our view, the company is
led by a professional management team and sets the industry standard in terms of
financial disclosure, having issued accounts according to IFRS for more than 5
years.
Sistema-HALS HALS $12.0 40% Sistema-HALS has managed to double its portfolio value in its first twelve months
as a public company, while the stock has struggled and currently trades below
November’s IPO price. In our view, the company has balanced exposure to all real
estate development sectors and access to a steady future pipeline, and it should
benefit from the diversified interests of parent company AFK Sistema. Risks in the
story include the unclear status of key projects linked to the parent company
(Detsky Mir, MGTS), a growing number of project delays, over-reliance on the
Moscow market, aggressive yield compression already priced into the independent
appraiser’s valuation, and general negative investor sentiment towards the stock.
Sberbank
UKRAINE
SBER $5.05 28% Sberbank is the most liquid proxy for Russia’s rapidly expanding economy and
improving living standards. It benefits directly from upgrades in Russia’s sovereign
rating. The bank has shown revenue-driven growth based on diversified exposure to
corporate and retail lending. Sberbank is keeping a strong presence on all markets. It
maintains 33% of the retail lending market and 54% of retail deposits. Very impressive
2006 IFRS results are backed with robust revenue flow.
Alchevsk Metals Plant ALMK $0.18 55% ALMK is poised for a 60% increase in steel output in 2008 and another 20% rise in
2009-2010. With finalized iron ore contracts that cover 100% of its needs in early
2008, it will likely deliver on production targets. In addition to the steel production
hike, rolled product yield should increase to 96% from 90% in 2007 and gas
consumption will be slashed 6x by 2010, which should decrease the share of gas
in COGS from 7% to just 2% in 2010 and insulate ALMK from gas price growth.
Stirol STIR $37.5 66% Stirol is Ukraine’s major private nitrogen fertilizer producer. Its consolidated 1H07
results showed sales and net income growth of 41% and 3.6x, respectively,
revealing that the stock has more fundamentals for price discovery than just the
natural gas factor. Rising natural gas prices are more than offset by continued
appreciation of nitrogen fertilizers, leaving enough room for pricing in Stirol’s
efficency and consolidation.
Luganskteplovoz
KAZAKHSTAN
LTPL $1.90 42% LTPL is restoring its optimal production level faster than we previously expected. The
order book should hit $145 mln in 2007 and grow 7.2x to $1,050 mln by 2012. We have
increased our 12M target price to $1.9/share and reiterated our BUY rating, as LTPL will
likely reappear as the dominant supplier of locomotives in the CIS in our forecast period.
BMB Munai KAZ $12.3 134% This promising E&P play intends to raise production via enlargement of its contract area if
its current exploration program and undergoing audit according to Western criteria (Aksaz-
Dolinnoe-Emir block of fields in the Caspian Sea region) bear fruit. In addition, BMB Munai
management has developed a good relationship with the Kazakh authorities, which we
view as an advantage. The stock is still 33% below the April 19 level, which we see as a
local peak for Kazakh equities.
2
Source: Alfa Bank Research
For more information, please contact the Alfa Bank sales team at (+7 495) 795-3712
The Morning Brief
January 25, 2008

RUSSIAN MARKET
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Source: RTS, MICEX, Bloomberg
Market Comment
26 Nov 30 Nov 6 Dec 12 Dec 18 Dec 24 Dec 28 Dec 14 Jan
RTS vol MICEX vol ADR vol RTS Index ($) MICEX Index (Rur) RTS2
The Morning Brief
January 25, 2008
Equities
18 Jan
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Paging Inspector Clouseau
Can we blame the French? That is the question being asked after yesterday’s
shocking announcement that Société Générale has suffered over €4.9 bln in
losses from a single rogue trader. SocGen’s top management found out about
the massive fraud the weekend prior to the sell-off, and the bank’s rapid
unwinding of very large positions last week may have, at the very least,
exacerbated the sharp declines in Europe. It has also emerged that the Fed
was not aware of SocGen’s losses when it announced its emergency 75 bpt
rate cut earlier this week, and that it had interpreted global market declines as
being purely a reflection of a rapidly weakening economy.
What does this mean for markets going forward? First, it indicates that the
changes in near-term US interest rates could be smaller. Fed funds futures
now show a 75% chance of a further 50 bpt reduction at next week’s meeting
vs. 100% just a day ago. Second, it may be encouraging to some that the
massive selling seen in Europe in the first half of the week was apparently not
being driven primarily by credit-related losses. Perhaps cold comfort, but
nonetheless a factor to take into account when gauging sentiment going
forward.
In local trade, after opening higher with a gap of around 3.5%, the RTS index
paused for consolidation yesterday before heading higher later in the session
as European bourses rallied strongly. At the close the RTS was up 5.2% at
1,988, while MICEX gained 5.8% to 1,662. Large cap gains were
spearheaded by LUKoil (+9.9%), MTS locals (+8.2%), Sberbank (+7.9%),
Surgutneftegaz (+7.9%), Rosneft (+5.6%), Norilsk Nickel (+5.4%), UES
(+5.1%) and Gazprom (+5.0%) and VTB (+4.7%).
The best performer in the mid-cap segment was Uralkali (+14.5%), with
Uralsvyazinform (+12.9%), Raspadskaya (+8.3%) and Sistema locals (+6.2%)
also recording large rebounds. In general, however, mid-caps took a back
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4
The Morning Brief
January 25, 2008
Equities
seat to the surge in the blue chips, with the RTS-2 index gaining just 1.5% to
2,437.
At the open of US trade, investors remained optimistic that a bond insurer
bailout plan was in the works. Weekly jobless claims came in at 301,000,
lower than the expected reading of 320,000 and below the typical
recessionary levels of over 450,000. Existing home sales at 4.89 mln were
only slightly below the consensus expectation of 4.95 mln. After managing to
stay in positive territory most of the session, the three main US indexes closed
with healthy gains (Dow +0.9%, S&P 500 +1.0%, Nasdaq +1.9%).
In commodities trade, metals prices continue to rebound on LME in response
to the latest Chinese growth figures and easing concern about global growth.
Yesterday copper gained 2.2%, nickel rose 1.3% and zinc added 2.1%. The
price of gold rebounded smartly to $912/oz on COMEX on the view that falling
US interest rates could hurt the dollar and stoke inflation. A weaker dollar is
also a bullish catalyst for the oil price, which jumped $2.42 on NYMEX to back
above the $90/bbl level.
According to the latest fund flow data from EPFR Global, Russia posted the
smallest weekly outflow among all categories we track. While Russia funds
lost $98 mln in the week to January 23, Brazil lost $169 mln, BRIC $685 mln,
India $848 mln, China + Greater China $2,091 mln, and GEM a whopping
$3,057 mln. Global funds saw a massive outflow of $5,890 mln as investors
sought safe havens and generally fled EM equities.
Russia’s clear outperformance in terms of fund flows suggests that investors
resisted the temptation to cut and run during the recent downturn in EM
markets and instead maintained their focus on the country’s compelling
macroeconomic, growth and political stories as well as cheap valuations.
Although delayed redemptions from closed-end funds may yet be in the
pipeline, which could show up closer to quarter’s end, this initial data is very
encouraging from the standpoint of foreign portfolio investment in the postcorrection
period.
Macroeconomics
Ronald P. Smith Head of Research (+7 495) 783-5005
Erik DePoy Mid-Cap Strategist (+7 495) 789-8518
CPI Inflation reaches 1.8% in first three weeks of year; NEGATIVE
CPI inflation reportedly reached 1.8% in the first three weeks of January,
exceeding the 1.7% posted in January 2007.
This figure suggests that January CPI growth will be at least 2%. Given the
increases in natural monopolies’ tariffs and global food inflation, as well as the
increased budgetary spending of late last year, the government’s inflation
forecast of 8.5% for this year already sounds unrealistic.
The monetary authorities are expected to continue supporting banks to avoid
a shortage of banking liquidity. Therefore, in our view the full-year figure will
reach 10.5% at best (please refer to our macroeconomic report issued
yesterday, “Russia 2008: Growth Financed from the State Coffers?”).
Natalia Orlova Senior Analyst (+7 495) 795-3677
Olga Naydenova Analyst (+7 495) 755-5931

SBER BUY
Closing Price: $3.86
Target Price: $5.05
Upside: 31%
GAZP BUY
Closing Price: $12.5
Target Price: $22.00
Upside: 76%
Banking
The Morning Brief
January 25, 2008
Equities
Sberbank expected to post strong 9M07 IFRS, $3.25 bln net profits
Today, Sberbank is expected to release 9M07 IFRS results, which we believe
will be quite strong. We expect the bank to post $3.25 bln in net profit,
including $1.4 bln in 3Q07 alone. Net interest income is expected to show a
stable growth rate, delivering $2.4 bln for 3Q07. The strong profitability in the
third quarter was mainly the result of $0.9 bln from non-interest income.
For 9M07, we expect the bank to have made $2.3 bln in non-interest income,
or 26% of total revenues. We also believe the bank was probably able to
control costs at $4.9 bln.
Figure 1: Sberbank key financials, $ mln
2006 1H07 9M07F 2007F
Net interest income 7,197 4,256 6,696 9,102
Net fees income 1,842 1,113 1,773 2,404
Total non-interest income 2,664 1,387 2,310 3,278
Operating expenditures -5,340 -3,271 -4,870 -6,835
Net profit 3,047 1,840 3,251 4,584
Total assets
Source: Company data, Alfa Bank Research
131,662 165,869 177,215 197,231
Sberbank managed to accelerate its lending growth substantially in October-
November, during the liquidity crunch, and by the end of 2007 had raised its
share of the corporate lending market to 35% from 32% at the beginning of
the year. We believe this strong growth will help the bank deliver profit growth
in 2008 that is much higher than the currently expected 20% y-o-y. We
reiterate our BUY rating for the bank with a 12-month target price of $5.05.
Oil & Gas
Natalia Orlova Senior Analyst (+7 495) 795-3677
Olga Naydenova Analyst (+7 495) 755-5931
Russian authorities drafting proposals to allow undiscriminated access
to gas transportation facilities; NEUTRAL
Yesterday the Federal Antimonopoly Service (FAS) approved the draft version
of an order allowing undiscriminated access to gas transportation capacities.
Next week the draft will be discussed with representatives of Gazprom, and it
is expected to be submitted to the government at the end of 1Q08.
Until now, access to gas transportation capacities has been regulated by
contracts with Gazprom in accordance with the gas monopoly’s internal
procedures. The document in question aims to make the process more
transparent describing all of necessary procedures in detail.
The draft version establishes timelines and a limited list of documents to be
filed when requesting gas transportation services or joining the gas
transportation network. If all the required documents are submitted, the
operator of gas transportation capacities can neither refuse to accept the
request nor demand additional documents.
On receiving the request, the operator either accepts it or reasonably refuses
it, notifying the applicant of the result in either case. If a refusal is
unreasonable or the operator fails to conclude a contract to provide gas
transportation services, the decision can be appealed in court. The draft
version of the order also explicitly prohibits the entity operating gas
transportation capacities to force applicants that are not the operator’s
subsidiaries to transfer property in favor of the latter.
5

6
The Morning Brief
January 25, 2008
Equities
The draft order on undiscriminated access to unutilized gas transportation
capacities aims to provide equal rights to entities using gas transportation
services. However, it stipulates that in the event of a capacity deficit,
applicants supplying gas for state, communal or social needs will take
precedence over the rest. In reality, therefore, the document favors Gazprom
and Itera, which supplies consumers in the Sverdlovsk region.
A further limitation of the draft is that the entity operating gas transportation
capacities also decides on the availability of spare capacities, which
effectively leaves in place the current situation allowing multiple opportunities
for Gazprom to discriminate against independent gas producers.
Although the proposals in question should improve the disclosure of
information on Gazprom’s gas transportation capacities, unless the shortage
of gas transportation facilities in Russia is addressed, Gazprom’s current
operations and behavior will hardly change.
We see this news as NEUTRAL for Gazprom and retain our BUY rating for the
stock with a 12-month target price of $22/share.
Konstantin Batunin Analyst (+7 495) 786-4876
Natalia Pushkina Analyst (+7 495) 785-9568

DNON BUY
Closing Price: $162.6
Target Price: $364
Upside: 124%
UKRAINIAN MARKET
Ukrainian equity market
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The Morning Brief
January 25, 2008
Equities
$ mln
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0
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Source: Bloomberg, PFTS
Market Comment
Volume, $ mln PFTS KAC20 re-based
PFTS bounces back
The PFTS Index followed world trends and bounced back by 3.3% on
Thursday. Sizable funds of free money chased seemingly undervalued stocks
after four consecutive days of corrections fueled market volatility. However,
the nature of the recovery was rather speculative as fundamentally the
prospects of the world economy are far from optimistic. From this vantage
point, it is rather difficult to expect the rebound to last long.
As if confirming increased volatility, the most speculative stocks, or those with
the weakest association between stock price dynamics and company
performance, showed the strongest returns during the day, i.e. Mariupol
Heavy Machinery Plant (+8.7%) and Azovzagalmash (+8.8%). After publishing
respectable unaudited IFRS financial highlights for 2007 in the middle of this
recent correction, Stirol (+5.8%) moved closer toward pricing in the disclosed
operating results. Steel companies advanced on strong industry fundamentals
and expected concentration of major players, with Enakievo Metals Plant
(+5.4%), Alchevsk Metals Plant (+4.1%), and Azovstal (+4.4%) all advancing.
Ukrsotsbank (+5.7%) gained on news of its completed sale, while its peer
Raiffeisen Bank Aval (+5.5%) followed closely behind.
Utilities
Denis Shauruk Analyst (+380 44) 490-1721
Dniprooblenergo increases net income by 40% in 2007; POSITIVE
CEO Eduard Sokolovsky announced that Dniprooblenergo increased net
income to $5.5 mln, a 40% increase y-o-y. He also mentioned that DNON’s
payment rate to the power pool was 101.7% and that he expected another
36% increase in DNON’s net profit in 2008.
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7

SGOK N/R
Closing Price: $3.12
Target Price: N/R
Upside: N/A%
CGOK N/R
Closing Price: $1.50
Target Price: N/R
Upside: N/A%
8
The Morning Brief
January 25, 2008
Equities
In our view, the declared payment rate does not allow for DNON to reduce its
debt, which is the second largest in the sector. However, given that the state’s
bankruptcy moratorium for energy companies is still in place, we view this
improvement in DNON’s performance as POSITIVE for the company’s
investment case.
Metals & Mining
Maksym Nikulyak Analyst (+380 44) 490-1620
Kateryna Ruskykh Analyst (+380 44) 490-1660
MMKI to cover 100% of its iron ore concentrate needs in 2008-2010;
POSITIVE
Metinvest will supply 8 mmt of iron concentrate annually to Mariupol Metals
Plant n.a. Ilich (MMKI) in 2008-2010 as stipulated in a three-year contract
between the two companies. In addition, 1.4-1.5 mmt of sinter (or 11% of
MMKI’s sinter output) produced by MMKI, with concentrate supplied by
Metinvest, will be delivered to Metinvest-affiliated steel plants, i.e. Azovstal,
ENMZ and Makeyevka Steelworks.
The news is very POSITIVE for MMKI as the agreed upon amount of iron ore
exceeds MMKI’s iron ore concentrate consumption in 2007 (7.8 mmt), which
implies more than 100% coverage of MMKI’s concentrate needs for the next
three years. This also means that MMKI will achieve this without importing
iron ore concentrate from Russia (1.5 mmt in 2007), thereby saving on
transportation costs. The deal between MMKI and Azovstal over sinter supply
points should also develop closer cooperation between the two groups.
SGOK and CGOK to post strong growth in 2007 net income; POSITIVE
Metinvest announced that Pivnichny GOK (SGOK) should raise 2007 net
income by 133% y-o-y to $364 mln, implying an estimated net income margin
of 25% (+6 ppt y-o-y). Tsentralny GOK also expects to increase net income by
121% to $123 mln in 2007, yielding an expected net income margin of 23%
(+8 ppt y-o-y). We attribute these strong results to favorable iron ore market
conditions throughout 2007.
Metinvest plans to increase CAPEX for these two companies by 25% to
$321 mln in 2008. We expect iron ore output in 2008 will stay flat, with 0% and
2% growth anticipated at CGOK and SGOK, respectively. SGOK is planning
to add another 2-2.5 mmt of pellets in 2009, which is about 20% of total
current output, after launching a new pelletizing line in 1Q09. The outlook for
GOKs is very POSITIVE as iron ore prices look to grow 40-50% this year.
Both companies have reportedly increased prices by 10% for 1Q08 and
should raise the price beginning in 2Q08 when the results of international ore
price negotiations become known.
Metinvest to cooperate with Evraz Group at Pivdenny GOK; POSITIVE
Alexander Vilkul, the head of Metinvest’s mining division, said that Metinvest
and Evraz Group, which recently acquired about 50% of Pivdenny GOK
(PGZK), will sign a transparent agreement governing their cooperation at the
plant. He also said that Metinvest and Smart Group have agreed that
Metinvest will acquire 25% of PGZK, while Smart Group will control the rest.
We think that an amicable agreement between the two largest shareholders is
POSITIVE for minority shareholders in PGZK.
Oleh Yuzefovych Analyst (+380 44) 490-1617

XXIC N/R
Closing Price: $23.4
Target Price: N/A
Upside: N/A
Real Estate
The Morning Brief
January 25, 2008
Equities
XXI Century postpones SPO in Warsaw indefinitely; NEUTRAL
XXI Century, a leading real estate developer in Ukraine, announced that it
would postpone indefinitely conducting an SPO in Warsaw in 1Q08. The
company’s Chairman Lev Partskhaladze noted in a press release that now
that markets have fallen, the new share issue is not in the best interest of
shareholders. In our view, this makes a great deal of sense, as the stock price
of XXI Century fell 16% over the last five days due to the current stock market
crisis worldwide.
We believe this news is NEUTRAL for XXI Century. On one hand, the
company needs capital to finance growth, but with the current market
situation, the placement is not likely to be successful.
Andriy Gubachov Analyst (+380 44) 490-1600
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KAZAKH MARKET
Kazakh equity market
KASE Index
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Source: Kazakh Stock Exchange, Irbis
Metals & Mining
7 Dec
The Morning Brief
January 25, 2008
13 Dec
24 Dec
28 Dec
Volume, $ mln KASE_Shares
8 Jan
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Equities
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Hambledon Mining back on track to achieving 2008 target output
Hambledon Mining has reported that the technical problems that arose at both
of its newly launched operations – an ore-processing plant at Ognevka
(copper, gold and silver-containing residues from zinc smelters) and another
treatment plant at the Sekisovskoye gold mine, both located close to Ust
Kamenogorsk, in eastern Kazakhstan – have now been resolved and the
plants are working normally.
The management says the plant at Ognevka is now processing 20 metric tons
of ore per hour, a figure that should increase to 30 mt per hour starting in
February. This suggests that the company will achieve its goal for the initial
phase of 150,000 mt per year and generate over $11 mln in revenues.
At the Sekisovskoye plant, the crushing and milling sections are now
operating satisfactorily, and its throughput design level of 850,000 mt per year
is expected to be achieved by the end of January. We note that the initial
production from the open pit is expected to be around 40,000 oz per year,
rising to over 100,000 oz as underground ore is substituted.
In our view, as a turnaround play, Hambledon has a good chance to unlock its
value as it begins to transform from a junior gold prospector into a producing
company, with both the Sekisovskoye and Ognevka plants expected to
become fully operational in late 2008.
Hambledom Mining is one of the stocks that we picked for our Kazakh model
portfolio last November with an initial weighting of 3.6%.
Rinat Gainoulline Analyst (+7 495) 795-3744

RUSSIAN MARKET TABLES
The Morning Brief
January 25, 2008
Equities
Figure 2: Most liquid stocks performance
RTS MICEX
Close* Change Volume* YTD Close* Change Volume* YTD Mcap 12 M TP Upside Rating
$ % $/1000 % $ % $/1000 % $ mln $ %
Gazprom 12.50 5.0 15 653 -11 12.54 3.3 1 407 303 -10 295 919 22.0 76 BUY
LUKoil 70.80 9.9 7 363 -19 70.77 7.4 403 681 -16 60 220 U/R N/A U/R
Gazpromneft 5.00 N/T N/T -21 5.36 7.1 11 447 -14 23 706 U/R N/A U/R
Rosneft 7.55 5.6 1 562 -21 7.59 4.2 122 022 -20 80 016 U/R N/A U/R
Surgutneftegaz 0.95 3.3 952 -23 0.97 5.2 101 837 -20 33 940 U/R N/A U/R
TNK-BP 1.68 8.4 1 425 -25 N/T N/T N/T N/A 26 623 U/R N/A U/R
Tatneft 5.00 4.0 1 200 -17 5.07 5.5 35 698 -16 10 893 U/R N/A U/R
Novatek 7.33 N/T N/T -2 7.29 2.4 5 868 -3 22 256 9.88 35 BUY
UES 1.09 5.1 10 742 -17 1.10 5.0 168 391 -15 44 859 1.90 74 BUY
Mosenergo (TGK-3) 0.23 N/T N/T -5 0.22 3.2 722 -7 8 944 0.23 2 HOLD
Irkutskenergo 1.00 1.0 7 -16 1.02 1.4 587 -15 4 743 1.14 15 HOLD
TGK-1 0.00120 N/T N/T -5 0.00120 1.4 1 -8 3 510 0.00141 18 HOLD
OGK-1 0.11 N/T N/T -7 0.16 N/T 19 N/A 5 089 0.117 3 HOLD
OGK-2 0.13 N/T N/T -16 N/T N/T N/T N/A 3 443 0.171 32 BUY
OGK-3 0.137 N/T N/T -10 0.132 0.9 74 -12 6 506 0.170 24 BUY
OGK-4 0.132 N/T N/T -1 0.134 0.3 125 0 6 461 0.101 -23 SELL
OGK-5 0.175 N/T N/T 0 0.178 0.2 2 617 1 6 190 0.151 -14 SELL
OGK-6 0.110 N/T N/T -14 0.000 N/T N/A N/A 2 940 0.170 55 BUY
MTS 13.15 8.2 2 248 -14 13.24 7.4 25 339 -14 26 212 20.4 55 BUY
Rostelecom 11.25 4.2 224 -4 11.37 5.1 27 491 -4 8 198 2.39 -79 SELL
Comstar-UTS N/T N/T N/T N/A N/T N/T N/T N/A N/A 12.1 N/A HOLD
Sitronics 0.12 N/T N/T -4 N/T N/T N/T N/A 924 N/R N/A N/R
MGTS 34.60 N/T N/T 2 33.17 0.0 N/A -4 2 762 36.50 5 BUY
Center Telecom 0.84 N/T N/T -10 0.82 -1.6 351 -8 1 326 0.80 -5 HOLD
NW Telecom 1.47 N/T N/T -14 1.48 -1.3 667 -15 1 295 1.60 9 HOLD
South Telecom 0.170 N/T N/T -14 0.171 0.7 197 -12 503 0.140 -18 SELL
Volga Telecom 4.65 -2.1 47 -21 4.77 4.0 463 -19 1 144 8.10 74 BUY
Siberia Telecom 0.098 N/T N/T -19 0.099 2.8 1 558 -15 1 171 0.148 52 BUY
Uralsvyazinform 0.053 12.9 53 -17 0.052 6.5 12 531 -16 1 696 0.075 43 HOLD
FE Telecom 5.00 N/T N/T -6 5.10 2.9 68 -5 478 5.50 10 BUY
Severstal 21.20 0.5 212 -7 21.52 3.5 4 413 -6 19 733 U/R N/A U/R
NLMK 3.45 N/T N/T -14 3.67 5.4 2 867 -10 20 677 U/R N/A U/R
MMK 1.05 N/T N/T -19 1.08 0.8 9 031 -17 11 733 N/R N/A N/R
Norilsk Nickel 226.00 5.4 4 527 -15 228.31 5.9 505 733 -14 41 381 303 34 HOLD
Polyus 47.50 N/T N/T 3 50.19 3.0 51 067 9 9 055 58.80 24 BUY
Polymetal 7.70 -1.3 116 9 8.39 5.4 2 243 19 2 118 N/R N/A N/R
TMK 9.75 2.6 146 -11 9.78 0.8 208 -12 8 512 N/R N/A N/R
AvtoVAZ 1.82 N/T N/T 1 1.86 0.0 587 -2 4 949 N/R N/A N/R
Sberbank 3.95 7.9 32 800 -6 3.90 6.2 365 459 -7 85 268 5.05 28 BUY
VTB 0.0042 0.0 42 -17 0.0042 3.9 120 066 -18 28 241 0.0059 40 BUY
Source: RTS, MICEX, Bloomberg, Alfa Bank Research
11

12
The Morning Brief
January 25, 2008
Equities
Figure 3: Local share price performance
RTS MICEX
Close* Change Volume* YTD Close* Change Volume* YTD Mcap 12 M TP Upside Rating
$ % $/1000 % $ % $/1000 % $ mln $ %
MOESK 0.109 N/T N/T 4 0.103 1.9 415 2 3 079 0.155 51 BUY
MGESK 0.090 1.1 135 0 0.091 4.4 311 9 2 542 0.130 43 BUY
TGK-2 0.00094 N/T N/T -6 0.00087 1.4 15 -11 1 041 0.00103 18 HOLD
TGK-4 0.00110 N/T N/T -11 0.00109 1.9 237 -9 1 453 0.00127 17 HOLD
TGK-5 0.00084 N/T N/T -8 0.00089 3.8 808 -1 1 033 0.00151 70 BUY
TGK-6 0.00100 N/T N/T -12 0.00103 3.7 262 -8 1 290 0.00133 29 BUY
TGK-8 0.00138 N/T N/T -1 0.00140 0.3 87 2 1 899 0.00130 -7 HOLD
TGK-9 0.00029 N/T N/T -9 0.00030 1.4 148 -7 1 652 0.00028 -7 HOLD
TGK-10 3.8 N/T N/T -8 3.5 -2.9 32 -11 1 622 4.0 14 HOLD
Kuzbassenergo 2.52 N/T N/T -8 2.6 4.1 9 -7 1 528 3.5 37 BUY
TGK-13 N/T N/T N/T N/A N/A N/A N/A N/A N/A N/A N/A N/A
TGK-14 0.0003 N/T N/T 0 0.0003 2.7 74 -9 232 0.00037 19 HOLD
Bashkirenergo 2.06 N/T N/T -4 N/T N/T N/T N/A 2 143 2.90 41 BUY
Novosibirskenergo 54.0 N/T N/T 8 N/T N/T N/T N/A 730 93.30 73 BUY
Megionneftegaz 35.0 N/T N/T -13 33.5 3.8 39 -13 3 482 58.16 66 HOLD
RITEK 9.85 N/T N/T -3 9.2 1.2 263 -8 983 9.17 -7 HOLD
Bashneft 14.5 N/T N/T -12 N/T N/T N/T N/A 2 467 20.54 42 BUY
Ufaneftekhim 3.55 N/T N/T 3 N/T N/T N/T N/A 977 6.43 81 BUY
Ufa Refinery 1.90 N/T N/T -2 N/T N/T N/T N/A 1 036 4.24 123 BUY
Novoil 1.51 N/T N/T 6 N/T N/T N/T N/A 1 200 2.42 60 BUY
NizhegorodNOS 62.0 N/T N/T 2 N/T N/T N/T N/A 1 110 104.7 69 BUY
Moscow Refinery 100.0 N/T N/T -13 N/T N/T N/T N/A 591 335.0 235 BUY
SalavatNOS 91.0 -1.1 18 10 N/T N/T N/T N/A 1 688 106.4 17 BUY
YaroslavNOS 1.0 N/T N/T 0 N/T N/T N/T N/A 933 1.89 89 HOLD
RBC 9.3 N/T N/T -11 9.6 1.7 1 228 -8 1 109 U/R N/A U/R
VSMPO 257 N/T N/T -15 260.4 -2.6 550 -18 2 963 U/R N/A U/R
Chelyabinsk Zinc 10.0 3.1 10 N/A N/T N/T N/T N/A 542 18.0 80 BUY
Priargunsk Mining 531 N/T N/T N/A N/T N/T N/T N/A 905 1 000 88 BUY
Raspadskaya 5.85 8.3 202 -10 6.0 9.9 2 410 -8 4 575 N/R N/A N/R
Chelyabinsk Pipe 3.90 1.3 79 -7 N/T N/T N/T N/A 1 842 U/R N/A U/R
Vyksa Pipe 2 080 N/T N/T 0 N/T N/T N/T N/A 3 915 U/R N/A U/R
Uralkali 7.10 14.5 383 -9 N/T N/T N/T N/A 15 083 9.20 30 BUY
Silvinit 915 N/T N/T 4 N/T N/T N/T N/A 7 161 1 310 43 BUY
Lengazspetsstroi 4 000 N/T N/T -29 N/T N/T N/T N/A 202 6 800 70 BUY
Irkut 0.88 N/T N/T -8 0.849 4.2 368 -9 856 N/R N/A N/R
OMZ 7.00 N/T N/T -7 7.15 3.0 14 -9 248 N/R N/A N/R
Power Machines 0.202 N/T N/T 0 N/T N/T N/T N/A 1 458 N/R N/A N/R
Aeroflot 3.62 2.8 119 -3 3.68 4.9 1 458 -3 4 020 4.88 35 BUY
UTair 0.73 N/T N/T -1 N/T N/T N/T N/A 418 0.97 34 BUY
S7 4 100 N/T N/T 4 N/T N/T N/T N/A 420 5 537 35 BUY
KrasAir 290 N/T N/T N/A N/T N/T N/T N/A 136 U/R N/A U/R
Baltika 48.8 N/T N/T -3 46.0 -0.5 255 -6 7 875 60 23 BUY
Lebedyansky 83.5 1.1 164 -9 N/T N/T N/T N/A 1 704 100 20 BUY
Seventh Continent 26.1 N/T N/T 1 26.40 -1.4 944 1 1 954 23.3 -11 SELL
Kalina 34.8 N/T N/T -14 33.69 0.1 85 -17 339 U/R N/A U/R
Pharmacy 36'6 61.3 N/T N/T -16 62.9 1.1 46 -13 490 U/R N/A U/R
Razgulyai Group 7.20 N/T N/T 6 7.8 3.8 303 17 763 N/R N/A N/R
Wimm-Bill-Dann 83.0 N/T N/T -8 85.2 2.3 231 -5 3 652 98 18 BUY
Open Investments 285 1.6 924 -8 N/T N/T N/T N/A 3 286 355 25 BUY
Veropharm 46.0 N/T N/T -13 N/T N/T N/T N/A 460 N/R N/A N/R
Magnit 47.0 3.8 3 054 -7 47.0 0.8 1 845 -9 3 384 55.0 17 BUY
UralSib 0.019 N/T N/T -13 N/T N/T N/T N/A 3 879 0.027 42 SELL
Rosbank 6.90 0.0 138 -7 7.0 -0.5 222 -4 4 967 7.60 10 HOLD
Vozrozhdenie 67.8 N/T N/T 0 69.4 0.6 199 1 1 610 83.0 22 BUY
Bank of Moscow 50.1 N/T N/T -5 47.0 9.5 199 -13 6 507 57.0 21 SELL
Source: RTS, MICEX, Alfa Bank Research; Notes: N/T – not traded, price reflects previous day; * includes quotes and matched transactions

Figure 4: Preferred stock performance
RTS MICEX
Close* Change Volume* YTD Close* Change Volume* YTD Mcap 12 M TP
Equities
Discount to
commons Upside Rating
$ % $/1000 % $ % $/1000 % $ mln $ % %
Bashneft pref 10.60 N/T N/T -4 N/T N/T N/T N/A 367 12.32 -27 16 HOLD
MegionNG pref 19.90 N/T N/T -7 20.42 4.5 24 -6 658 50.75 -43 155 BUY
SurgutNG pref 0.50 -2.0 136 -23 0.50 2.1 49 620 -21 3 851 U/R -47 N/A U/R
Tatneft pref 2.85 1.8 71 -23 2.9 4.5 518 -18 415 2.21 -43 -22 SELL
UES pref 0.90 N/T N/T -25 0.94 5.6 11 234 -17 1 868 1.73 -18 92 BUY
Rostelecom pref 2.00 N/T N/T -35 2.27 9.7 28 290 -21 486 2.02 -80 1 SELL
Transneft pref 1 685 5.3 923 -16 1 687 2.8 10 747 -15 7 860 U/R N/A N/A U/R
Ufaneftekhim pref 1.55 N/T N/T 0 N/T N/T N/T N/A 100 4.80 -56 210 BUY
Ufa Refinery pref 0.94 N/T N/T -8 N/T N/T N/T N/A 70 3.20 -51 240 BUY
Novoil pref 0.75 N/T N/T -5 N/T N/T N/T N/A 59 1.82 -51 144 BUY
Sberbank pref 2.35 N/T N/T -22 2.46 7.3 25 770 -13 2 350 4.29 -41 83 BUY
Baltika pref 30.0 0.0 30 -12 31.2 3.5 21 -8 406 48.0 -38 60 BUY
Priargunsk Mining pref 290 N/T N/T -12 N/T N/T N/T N/A 120 750 -45 159 BUY
Silvinit pref 620 N/T N/T -5 N/T N/T N/T N/A 1 617 904 -32 46 BUY
Source: RTS, MICEX, Alfa Bank Research; Notes: N/T – not traded, price reflects previous day; * includes quotes and matched transactions
Figure 5: ADR/GDR performance
Europe United States Implied
Ratio Close Change Volume YTD Close Change Volume YTD 12 M TP Upside rating
$ % $/1000 % $ % $/1000 % $ %
Gazprom 4 in 1 49.8 4.6 1 098 841 -12 50.2 5.9 155 020 -11 88 77 BUY
LUKoil 1 in 1 70.3 7.8 343 184 -19 70.9 5.7 20 267 -18 U/R N/A U/R
Gazpromneft 5 in 1 26.9 7.2 475 0 27.0 10.8 265 -17 U/R N/A U/R
Rosneft 1 in 1 7.5 3.4 91 689 -23 N/T N/T N/A N/A U/R N/A U/R
Surgutneftegaz 50 in 1 48.5 5.5 43 742 -21 49.0 7.7 234 -19 U/R N/A U/R
Tatneft 20 in 1 99.0 4.2 22 595 -18 N/T N/T N/A N/A U/R N/A U/R
Yukos 4 in 1 N/T N/T N/A N/A N/T N/T N/A N/A Susp N/A SUSP
Novatek 10 in 1 69.3 3.4 46 380 -10 N/T N/T N/A N/A 98.8 43 BUY
Integra 1 in 20 13.1 0.8 6 853 -23 N/T N/T N/A N/A 21.5 64 BUY
UES 100 in 1 109.0 3.8 113 063 -16 110.0 6.0 106 -15 190 74 BUY
Mosenergo 100 in 1 22.3 1.1 N/A -5 23.3 0.0 N/A -1 23 3 HOLD
Irkutskenergo 50 in 1 51.5 1.7 133 -13 60.5 0.0 N/A 16 57 11 HOLD
MTS 5 in 1 N/T N/T N/A N/A 86.6 4.0 179 400 -15 102 18 BUY
VimpelCom 1 in 4 34.2 16.0 454 -23 34.2 5.8 160 687 -18 50 46 BUY
Golden Telecom 1 in 1 103.5 1.1 11 5 101.5 -0.2 75 461 1 U/R N/A U/R
Comstar UTS 1 in 1 10.3 2.5 7 854 -19 N/T N/T N/A N/A 12.1 18 HOLD
Sitronics 50 in 1 6.0 0.0 N/A 4 N/T N/T N/A N/A N/R N/A N/R
Moscow CableCom - N/T N/T N/A N/A N/T N/T N/A N/A N/R N/A N/R
Sistema 1 in 50 37.0 5.1 38 776 -11 N/T N/T N/A N/A 35 -5 HOLD
Rostelecom 6 in 1 67.8 5.9 3 991 -11 68.0 4.6 9 928 -2 14.34 -79 SELL
MGTS 1 in 1 31.7 -0.9 N/A -9 N/T N/T N/A N/A 36.50 15 BUY
Center Telecom 100 in 1 79.0 3.9 N/A -13 N/T N/T N/A N/A 80 1 HOLD
NW Telecom 50 in 1 73.2 0.0 N/A -15 N/T N/T N/A N/A 80 9 HOLD
South Telecom 50 in 1 9.9 0.0 N/A -1 N/T N/T N/A N/A 7.0 -29 SELL
Volga Telecom 2 in 1 9.5 -4.3 N/A -17 10.0 2.6 3 -17 16.20 71 BUY
Siberia Telecom 800 in 1 77.6 -3.6 N/A -18 71.0 0.0 N/A -23 118.4 53 BUY
Uralsvyazinform 200 in 1 10.2 13.1 22 -20 N/T N/T N/A N/A 15.0 47 HOLD
Far East Telecom 30 in 1 153.7 0.0 N/A -5 N/T N/T N/A N/A 165 7 BUY
CTC Media 1 in 1 N/T N/T N/A N/A 26.8 1.1 28 292 -11 N/R N/A N/R
RBC 4 in 1 N/T N/T N/A N/A N/T N/T N/A N/A U/R N/A U/R
Rambler 1 in 1 24.6 -3.0 4 -18 N/T N/T N/A N/A N/R N/A N/R
Norilsk Nickel 1 in 1 227.0 3.9 207 665 -16 N/T N/T N/A N/A 303 33 HOLD
NLMK 10 in 1 36.6 7.6 15 458 -11 N/T N/T N/A N/A U/R N/A U/R
Severstal 1 in 1 21.4 4.4 31 515 -8 N/T N/T N/A N/A U/R N/A U/R
MMK 13 in 1 14.0 5.4 2 951 -17 N/T N/T N/A N/A N/R N/A N/R
Polymetal 1 in 1 7.7 4.1 4 401 8 N/T N/T N/A N/A N/R N/A N/R
TMK 4 in 1 39.0 4.1 17 981 -13 N/T N/T N/A N/A N/R N/A N/R
Polyus 1 in 1 49.0 4.0 27 643 2 49.2 5.9 1 155 4 58.8 20 BUY
OMZ 1 in 1 7.0 0.0 N/A -12 N/T N/T N/A N/A N/R N/A N/R
Celtic Resources - 5.7 N/T N/A 1 N/T N/T N/A N/A 5.10 -11 HOLD
Highland Gold Mining - 3.9 3.2 2 662 25 N/T N/T N/A N/A U/R N/A U/R
Peter Hambro Mining - 26.2 5.3 51 269 8 N/T N/T N/A N/A 25.4 -3 HOLD
Trans-Siberian Gold - 0.4 -1.1 0 -11 N/T N/T N/A N/A N/R N/A N/R
Mechel 3 in 1 N/T N/T N/A N/A 82.9 6.6 96 546 -15 U/R N/A U/R
Evraz 1 in 3 68.2 10.0 67 406 -12 N/T N/T N/A N/A U/R N/A U/R
Chelyabinsk Zinc 1 in 1 9.5 2.9 1 349 -18 N/T N/T N/A N/A 18.0 90 BUY
PIK Group 1 in 1 28.0 1.8 8 989 -8 N/T N/T N/A N/A 35.6 27 BUY
AFI Development 1 in 1 7.4 1.0 9 327 -22 N/T N/T N/A N/A 11.1 51 HOLD
Sistema Hals 1 in 20 8.6 1.2 355 -12 N/T N/T N/A N/A 12.0 40 BUY
RGI International - 8.1 -0.2 559 -16 N/T N/T N/A N/A 12.0 49 BUY
MirLand - 9.0 -0.9 1 502 -12 N/T N/T N/A N/A 14.5 62 BUY
Wimm-Bill-Dann 1 in 1 N/T N/T N/A N/A 116.0 2.7 20 360 -11 140.0 21 BUY
X5 Retail Group 1 in 4 33.3 4.1 7 164 -9 N/T N/T N/A N/A 42.0 26 BUY
Amtel-Vredestein 1 in 1 2.7 1.9 3 -2 N/T N/T N/A N/A U/R N/A U/R
Efes Breweries 5 in 1 30.3 -0.8 16 -11 N/T N/T N/A N/A N/R N/A N/R
Cherkizovo Group 1 in 150 12.5 -9.1 N/A -13 N/T N/T N/A N/A 12.6 1 SELL
The Morning Brief
January 25, 2008
13

14
The Morning Brief
January 25, 2008
Equities
VTB 2000 in 1 8.4 5.4 94 739 -17 N/T N/T N/A N/A 11.8 40 BUY
Source: Bloomberg, Alfa Bank Research; Notes: N/T – not traded, price reflects previous day
Figure 8: Major macroeconomic parameters
Figure 6: RTS Index futures performance
Close Change Maturity
$ %
VEH8 2 026.10 5.80 Mar 08
VEM8
Source: Bloomberg
2 074.50 7.55 Jun 08
Figure 7: Equity futures performance
Close Change Volume Delivery
$ % $/1000
GAZR-03.08 1 259.19 3.06 263 283.87 14.03.2008
LKOH-03.08 711.10 7.16 53 933.05 14.03.2008
EERU-03.08 1 126.04 7.52 14 428.01 14.03.2008
RTKM-03.08
Source: Bloomberg
1 142.69 8.27 277.67 14.03.2008
Unit Current YTD, %
Hard currency reserves $ bln 477.7 0.8
Monetary base (M0) R bln 5 513.3 0.0
R/$ exchange rate R/$ 24.6349 0.4
Inflation, M-o-M
Source: Reuters
% 1.1 11.9
Figure 9: Major commodity prices
Oil, $/barrel (IPE CIF Close Previous Change Change 3 Metals Close Previous Change Change 3
Prices)
close
months
close
months
$ $ % % $ $ % %
Brent, spot 89.33 86.67 3.1 6.1 Gold, $/oz 911.3 912.9 -0.2 18.5
1-month 89.54 89.07 0.5 2.4 Platinum, $/oz 1 617 1 611 0.4 11.6
3-month 88.73 88.37 0.4 2.4 Palladium, $/oz 374.8 373.5 0.3 2.7
Urals 87.27 84.63 3.1 6.8 Nickel, $/ton* 27 250 26 905 1.3 -11.5
WTI 90.06 87.64 2.8 1.1 Copper, $/ton* 7 020 6 870 2.2 -8.7
REBCO 85.58 82.74 3.4 6.3 Zinc, $/ton 2 237 2 188 2.3 -20.7
Source: Bloomberg, NYMEX; Note: N/A – not available
Figure 10: Russian debt market
Maturity Next Coupon
coupon rate
payment
Closing Change YTM Current
price
yield
Duration Spread
over RFR
Issue
volume
% % % % % Years bpts mln
Currency
Sovereigns
Russia-10 03/31/10 03/31/08 8.3 104.5 0.03 4.3 7.9 1.1 193.5 1 538 USD
Russia-18 07/24/18 07/24/08 11.0 145.5 -0.03 5.3 7.6 7.2 159.7 3 467 USD
Russia-28 06/24/28 06/24/08 12.8 183.9 0.00 5.7 6.9 10.5 202.6 2 500 USD
Russia-30 03/31/30 03/31/08 7.5 115.4 -0.12 5.3 6.5 6.9 160.0 2 011 USD
MinFins
MinFin-8 05/14/08 05/14/08 3.0 99.5 0.04 4.6 3.0 0.3 226.8 2 837 USD
MinFin-11 05/14/11 05/14/08 3.0 94.7 0.29 4.8 3.2 3.1 237.4 1 750 USD
Source: Reuters; Note: N/A – not applicable

The Morning Brief
January 25, 2008
Equities
Figure. 11: Valuation table, $ mln
EV Revenues EBITDA Net profit EV/Sales EV/EBITDA P/E Revenues,
CAGR
2006 2007F 2006 2007F 2006 2007F 2006 2007F 2008F 2006 2007F 2008F 2006 2007F 2008F 2007-2008F
Gazprom 331 055 79 151 94 067 35 147 40 975 22 558 24 274 4.2 3.5 3.0 9.4 8.1 6.6 13.1 12.2 9.6 19%
LUKoil 66 098 68 109 66 914 12 328 10 304 7 484 5 674 1.0 1.0 1.0 5.4 6.4 6.0 8.0 10.6 10.2 -2%
Rosneft 107 659 33 099 40 435 7 242 9 605 3 533 4 132 3.3 2.7 2.6 14.9 11.2 9.6 22.6 19.4 14.8 13%
TNK-BP Holding 29 150 32 114 30 143 7 161 6 105 6 409 3 871 0.9 1.0 1.0 4.1 4.8 5.6 4.2 6.9 8.6 -5%
Gazpromneft 23 243 20 172 18 670 5 168 4 245 3 661 2 660 1.2 1.2 1.3 4.5 5.5 6.9 6.5 8.9 13.1 -6%
Surgutneftegaz 29 613 18 408 17 339 7 161 6 105 2 836 2 963 1.6 1.7 1.8 4.1 4.9 5.6 12.0 11.5 13.3 -5%
Novatek 22 152 1 795 2 340 823 1 112 501 725 12.3 9.5 6.5 26.9 19.9 12.6 44.4 30.7 19.0 38%
Oil & Gas average 1 3.5 2.9 2.4 9.9 8.7 7.5 15.8 14.3 12.7
UES 50 312 32 510 37 861 5 708 8 636 1 245 2 823 1.5 1.3 1.1 8.8 5.8 5.7 37.9 16.7 21.0 17%
Irkutskenergo 4 809 782 865 125 145 37 50 6.1 5.6 5.1 38.6 33.1 26.2 99.5 99.5 49.8 10%
Bashkirenergo 2 254 1 118 1 300 167 203 44 51 2.0 1.7 1.5 13.5 11.1 8.8 51.4 41.1 29.4 17%
Novosibirskenergo 900 636 726 111 132 70 84 1.4 1.2 1.1 8.1 6.8 5.0 11.4 9.6 6.7 13%
OGK-5 4 997 921 1 139 136 207 162 80 5.4 4.4 3.9 36.7 24.2 21.5 38.1 77.7 71.2 17%
TGK-5 322 401 460 59 53 n/a n/a 0.8 0.7 0.6 5.5 6.1 5.4 n/a n/a n/a 15%
MOESK 3 524 896 1 536 309 824 150 484 3.9 2.3 1.6 11.4 4.3 2.7 20.5 6.4 4.4 55%
MGESK 1 802 373 661 202 461 105 301 4.8 2.7 2.1 8.9 3.9 2.9 17.5 6.1 4.5 51%
Utilities average 1 3.3 2.5 2.1 16.4 11.9 9.8 39.5 36.7 26.7
Sistema 25 448 9 703 11 745 3 931 4 583 630 769 2.6 2.2 1.8 6.5 5.6 5.0 28.4 23.2 20.5 19%
MTS 37 190 6 384 8 446 3 230 4 381 1 076 2 347 5.8 4.4 3.5 11.5 8.5 6.8 32.1 14.7 11.4 29%
Comstar-UTS 4 923 1 120 1 435 429 634 82 276 4.4 3.4 3.3 11.5 7.8 7.7 52.2 15.5 15.7 16%
VimpelCom 36 841 4 868 7 110 2 452 3 677 811 1 538 7.6 5.2 3.9 15.0 10.0 7.5 43.3 22.8 14.0 39%
Golden Telecom 4 305 855 1 281 227 341 86 171 5.0 3.4 2.3 18.9 12.6 7.1 43.0 21.7 12.6 49%
Rostelecom 7 821 2 263 2 270 380 460 54 148 3.5 3.4 3.7 20.6 17.0 16.6 153 55.4 45.8 -3%
MGTS 3 119 802 993 356 451 125 229 3.9 3.1 2.9 8.8 6.9 6.3 20.1 11.0 9.7 16%
RBC 1 079 200 244 54 74 35 47 5.4 4.4 3.5 20.0 14.6 10.8 31.7 23.6 16.8 24%
Center Telecom 2 466 1 084 1 286 396 442 68 90 2.3 1.9 1.9 6.2 5.6 5.5 19.5 14.7 17.0 9%
NW Telecom 1 739 759 853 245 308 47 110 2.3 2.0 1.9 7.1 5.6 5.2 27.7 11.8 10.9 9%
South Telecom 1 550 660 728 229 215 13 3 2.3 2.1 2.1 6.8 7.2 6.8 39.5 167.8 24.0 6%
Volga Telecom 2 002 914 1 180 321 442 79 165 2.2 1.7 1.6 6.2 4.5 4.2 14.5 6.9 6.3 16%
Sibir Telecom 1 966 1 110 1 369 271 513 43 210 1.8 1.4 1.4 7.3 3.8 3.5 27.2 5.6 5.1 14%
Uralsvyazinform 3 075 1 248 1 477 344 551 30 191 2.5 2.1 2.0 8.9 5.6 5.0 56.5 8.9 7.1 12%
FE Telecom 897 400 485 100 161 12 62 2.2 1.8 1.8 9.0 5.6 5.0 39.8 7.7 6.6 12%
Telecom average 1 3.6 2.8 2.5 11.0 8.1 6.9 41.9 17.4 14.3
Norilsk Nickel 41 590 11 550 17 174 7 611 12 396 5 965 8 325 3.6 2.4 2.6 5.5 3.4 3.8 7.2 5.2 6.1 17.9%
Severstal 21 309 12 423 12 588 2 987 2 921 1 231 1 203 1.7 1.7 1.7 7.1 7.3 7.8 16.0 16.4 19.8 0.1%
NLMK 19 334 6 046 6 574 2 631 2 758 2 066 1 785 3.2 2.9 3.1 7.3 7.0 7.5 10.0 11.6 12.5 2%
Chelyabinsk Zinc Plant 557 553 599 178 177 96 111 1.0 0.9 1.0 3.1 3.1 2.6 5.6 4.9 3.9 2%
Evraz 26 145 8 385 9 121 2 395 2 395 1 366 1 079 3.1 2.9 3.0 10.9 10.9 11.7 17.5 22.2 24.8 3%
Polus Gold 7 604 735 775 286 357 1 157 236 10.4 9.8 10.1 26.6 21.3 23.6 7.1 34.8 41.5 1%
Priargunsk Mining 949 212 453 29 242 9 172 4.5 2.1 1.6 33.2 3.9 2.5 92.6 4.9 3.2 69%
Highland Gold Mining 1 383 102 107 -65 11 -96 -7 13.5 12.9 13.1 nm 125 94.1 neg neg neg 1%
Peter Hambro Mining 2 248 157 187 80 97 42 47 14.4 12.0 6.2 28.3 23.2 10.5 50.6 45.1 16.7 52%
Metals average 1 6.1 5.3 4.7 15.3 22.7 18.2 16.3 18.1 16.1
Wimm-Bill-Dann 5 566 1 762 2 416 218 320 95 148 3.2 2.3 1.9 25.5 17.4 12.9 53.7 34.5 24.7 30%
Lebedyansky 1 910 710 983 139 182 86 102 2.7 1.9 1.5 13.7 10.5 8.3 19.8 16.7 13.3 32%
Baltika 8 023 2 183 2 442 694 807 415 518 3.7 3.3 3.0 11.6 9.9 8.7 18.7 15.0 12.5 12%
Pharmacy Chain 36.6 1 013 424 784 -0.3 22 37 143 2.4 1.3 0.8 nm 47.1 21.2 13.3 3.4 neg 71%
X5 Retail Group 8 202 3 551 5 183 295 485 103 181 2.3 1.6 1.2 27.8 16.9 12.4 70.1 39.8 28.1 40%
Seventh Continent 2 011 958 1 285 104 126 68 83 2.1 1.6 1.3 19.4 16.0 13.1 28.9 23.5 26.4 29%
Magnit 3 757 2 505 3 697 122 197 57 92 1.5 1.0 0.7 30.7 19.1 12.8 59.5 36.8 28.0 46%
Cherkizovo Group 995 630 842 74 113 30 45 1.6 1.2 1.0 13.4 8.8 6.4 24.6 16.4 10.7 29%
Amtel-Vredestein 771 817 1 019 77 80 -5 -28 0.9 0.8 0.7 10.0 9.6 5.8 neg neg 19.6 20%
Consumer average 1 2.3 1.7 1.3 19.0 17.3 11.3 36.1 23.3 20.4
PIK Group 14 680 1 546 2 681 474 827 298 461 9.5 5.5 3.7 nm 17.8 10.3 46.3 30.0 14.1 60%
AFI Development 3 212 4 47 118 45 112 45 nm 68.3 11.7 27.2 71.4 13.0 34.6 86.1 3.1 729%
Open Investments 3 866 86 173 24 12 58 80 45.0 22.3 9.2 161.1 322.2 43.0 66.7 48.3 6.7 120%
Sistema-HALS 1 880 283 453 15 90 56 37 6.6 4.2 3.0 129.7 20.9 12.8 34.7 51.6 12.5 48%
RGI International 1 274 0.4 3 -5 -1 55 700 nm nm 27.5 nm nm 36.2 18.7 1.5 41.7 977%
MirLand 900 4 45 -6 22 30 95 nm 19.8 1.3 nm 40.9 2.4 30.1 9.5 5.8 1209%
Real Estate average 1 20.4 24.0 9.4 106.0 94.6 19.6 38.5 37.8 14.0
Uralkali 15 417 820 1 132 311 552 129 351 18.8 13.6 7.5 49.6 27.9 11.6 116.9 43.0 16.0 59%
Silvinit 8 834 674 1 025 279 550 180 393 13.1 8.6 4.8 31.7 16.1 7.0 39.8 18.2 7.6 65%
Fertilizers average 1 16.0 11.1 6.1 40.6 22.0 9.3 78.4 30.6 11.8
Revenues EBITDA Net profit NI Margin P/BV P/E Revenues,
CAGR
2006 2007F 2006 2007F 2006 2007F 2006 2007F 2008F 2006 2007F 2008F 2006 2007F 2008F 2007F
Sberbank - 9 861 12 380 - - 3 047 4 584 6.6% 5.5% 5.8% 7.3 3.7 3.1 28.0 18.6 11.8 34%
VTB - 3 252 3 968 - - 1 179 1 314 3.9% 3.5% 4.0% 4.1 1.8 1.7 24.4 21.9 15.0 34%
Vozrozhdenie - 218 356 - - 30 69 5.9% 6.1% 6.2% 7.7 3.4 2.7 52.9 23.3 13.5 50%
Banks average 1 5.5% 5.0% 5.3% 6.4 2.9 2.5 35.1 21.3 13.4
Source: company data, Bloomberg.
15

Kazakhstan Equities
16
KAZAKH MARKET TABLE
Figure 12: Most liquid stocks performance
Type Market Ratio Close Change Volume YTD MCap 12M Target
Price
The Morning Brief
January 25, 2008
Equities
Upside Rating
$ % $/1000 % $ mln $ %
Kazmunaigas E&P GDR Europe 1/6 in 1 28.25 2.4 10 120 -9 11 902 N/R N/A N/R
Petrolinvest Common stock Europe 131 0.2 2 186 -2 767 N/R N/A N/R
Arawak Energy Common stock U.S., Canada 2.24 2.9 68 -9 388 N/R N/A N/R
Max Petroleum Common stock Europe 1.08 9.5 4 856 -10 354 N/R N/A N/R
BMB Munai Common stock U.S. 5.25 6.1 763 -16 235 12.3 134 BUY
Transmeridian Exploration Common stock U.S. 1.29 -0.8 543 -35 151 N/R N/A N/R
Tethys Petroleum Common stock U.S., Canada 2.57 2.4 39 -14 120 N/R N/A N/R
Caspian Services Common stock U.S. 2.55 N/T N/T -23 107 N/R N/A N/R
Victoria Oil & Gas Common stock Europe 0.424 8.6 1 318 19 53 N/R N/A N/R
Caspian Energy Common stock U.S., Canada 0.337 8.4 13 1 35 N/R N/A N/R
Big Sky Energy Common stock U.S. 0.09 12.5 3 20 14 U/R N/A U/R
Caspian Holdings Common stock Europe 0.071 4.6 9 11 7 N/R N/A N/R
Eurasian Natural Resources Common stock Europe 12.59 7.5 16 502 -1 16 207 N/R N/A N/R
Kazakhmys Common stock Europe 21.8 6.5 100 667 -20 9 930 21 -4 HOLD
Uranium One Common stock U.S., Canada 7.24 7.8 24 049 -19 3 378 N/R N/A N/R
KazakhGold ADR Europe 1 in 1 24.85 1.7 1 776 -3 1 257 40.6 63 BUY
Oriel Resources Common stock Europe 1.15 10.5 782 7 734 N/R N/A N/R
European Minerals Corp Common stock U.S., Canada 1.33 8.5 652 -7 379 N/R N/A N/R
ShalkiyaZinc GDR Europe 1/10 in 1 4.5 0 N/A -10 254 N/R N/A N/R
Bekem Metals Common stock U.S. 2 N/T N/A N/A 250 N/R N/A N/R
Hambledon Mining Common stock Europe 0.37 5.2 567 -10 157 N/R N/A N/R
Alhambra Resources Common stock U.S., Canada 1.19 2 18 -1 90 N/R N/A N/R
Frontier Mining Common stock Europe 0.158 1 3 -13 34 N/R N/A N/R
Kazkommertsbank GDR Europe 1 in 1 14.12 2.9 38 718 5 4 060 13.5 -4 HOLD
Halyk Savings Bank GDR Europe 4 in 1 15.8 3.6 9 710 2 3 887 24 52 BUY
Bank TuranAlem ADR Europe 1 in 1 614 1.2 N/A -12 3 294 900 47 HOLD
ATF Bank GDR Europe 1 in 1 58.94 1.2 N/A 12 2 098 N/R N/A N/R
Alliance Bank GDR Europe 1/30 in 1 5.45 -3.5 501 9 1 576 7.0 28 HOLD
TemirBank GDR Europe 1 in 1 18.61 0.3 N/A -15 279 N/R N/A N/R
KazakhTelecom ADR Europe 1/3 in 1 89.88 2.9 360 -11 2 945 N/R N/A N/R
Steppe Cement Common stock Europe 4.93 1 48 -10 562 7.8 58 BUY
Kazakhstan Kazagy GDR Europe 1 in 1 5 0 N/A -5 524 N/R N/A N/R
Chagala Group GDR Europe 4 in 1 7.75 0 50 2 165 N/R N/A N/R
Source: Bloomberg, Alfa Bank Research

CALENDAR
Figure 13: Calendar of upcoming events
The Morning Brief
January 25, 2008
Equities
International January 28 US
New Home Sales
Eurozone
Eurozone M3
Utilities
Late January TGK-4 new share issue
Late January TGK-6 to publish its 2006 IFRS results
Late January TGK-10 to publish its 2006 IFRS results
Banking
January 25 Sberbank to release 3Q07 IFRS financial results
January 30 Sberbank to release 2007 RAS financial results (key figures)
February 4 Sberbank to release 2007 RAS financial results
Source: Bloomberg, Alfa Bank Research
17

Contact Information
Alfa Bank (Moscow)
Head of Equities Dominic Gualtieri
Telephone (+7 495) 795-3649
Facsimile (+7 495) 745-7897
Research Department
Telephone (+7 495) 795-3676
Facsimile (+7 495) 745-7897
Head of Research Ronald P. Smith
Strategy Ronald P. Smith, Erik DePoy
Oil & Gas Konstantin Batunin, Natalia Pushkina
Macroeconomics, Banking Natalia Orlova, Olga Naydenova
Telecoms, Technology, Internet Ivan Shuvalov
Utilities Alexander Kornilov, Elina Kulieva
Metals & Mining Chirvani Abdoullaev, Maxim Semenovykh
Consumer Goods, Retail, Media Brady Martin, Vitaly Kupeev
Real Estate Brady Martin, Alexey Kryuchkov
Transportation, Fertilizers, Machine-Building Roydel Stewart, Andrei Fedorov
Kazakh Product Rinat Gainoulline
Fixed Income Ekaterina Leonova, Pavel Simonenko
Technical Analysis Vladimir Kravchuk, Ph.D.
Russian Product Angelika Henkel, Ph.D., Vladimir Dorogov, Vladimir Kravchuk, Ph.D.
Editorial David Spencer
Translation Anna Sholomitskaya, Dmitry Dolgin
Production Aleksei Balashov
Equity Sales & Trading
Telephone (+7 495) 795-3712
Facsimile (+7 495) 745-7897
International Sales Kirill Surikov, Mikhail Shipitsin, Shani Kogan, David Johnson,
Michael McAtavey
Domestic Sales Alexander Nasonov, Konstantin Shapsharov, Vsevolod Topolyansky
Address 12 Akad. Sakharov Prospect, Moscow, Russia 107078
Alfa Capital (Kiev)
Research Department
Telephone (+380 44) 490-1600
Strategy, Macroeconomics, Fixed Income Sergiy Kulpinsky, Ph.D.
Metals & Mining Oleh Yuzefovych
Engineering, Chemicals Denis Shauruk
Utilities Maksym Nikulyak, Kateryna Ruskykh
Consumer Goods Tetyana Orlova
Banking Andrey Zaripov
Real Estate, Small-Cap Strategy Andriy Gubachov
Editorial Orysia M. Kulick
Equity Sales
Sales Sergey Grigorian, Ivan Shehavtsov, Anfisa Anikushina
Telephone (+380 44) 490-1600
Alfa Capital Markets (London)
Telephone (+44 20) 7588-8500
Facsimile (+44 20) 7382-4170
Sales Maxim Shashenkov, Mark Cowley
Sales Trading Ross Hassett, Douglas Babic
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Telephones (+1 212) 421-8563 / (+1 212) 421-7500
Facsimile (+1 212) 421-8633
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Sales Trading Roman Kogan
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