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Market Color: new appetite for Russia

|Includes: Mechel OAO (MTL)

Goldman Sachs sees relatively encouraging action in Russia as the Moscow market builds on some relatively bullish moves on some of its biggest public names.

Despite some profit taking, there seems to be some new appetite for large-cap names like Gazprom OGZPY and Sberbank SBRBF on the dips. Preferred shares are getting a very slight premium over the ordinary (non-voting) stocks, which will probably not make much difference to ADR-oriented investors simply hungry for exposure to these names in any share class.

In fact, Goldman thinks people who missed the early stages of the Moscow rally are now looking to grab preferred stock for just this reason: these shares are the only ones available at a decent price. Another encouraging sign after the market's recent upswing...

On the steel side, there is some tentative buying out there on names like Evraz, but Severstal seems to be struggling to gain any headway at all. Mechel MTL is down a significant amount this morning as well.

Otherwise, Goldman notes that nickel -- that is, Norilsk (NILSY, quote) -- "feels tired up here" in the absence of new bullish catalysts.

Given gossip around Rusal and the next NILSY board meeting, maybe the absence of catalysts may actually give NILSY a bit of a push. 

Disclosure: no positions