Hello, dear participants of the WellMax international system, clients, partners and investors of IFC company!

We continue informing you about the results of our activity and the perspective of IFC`s specialists on situation and processes in international and regional economies.

In January 2017 the assets value of the WellMax investment portfolio increased by 0.98% in USD and euro that is equivalent to 11.76% per annum. There was a 14.28% yield per annum in rubles and 12.84% - in yuans.

From January 10, 2017 till February 10, 2017 the assets value of the WellMax Premium investment portfolio increased by 13.57% in USD.

The last month`s increase in assets value of the WellMax Premium investment portfolio was caused by successful operations in the US market of natural gas. As we forecasted in our December report, due to a warmer than usual weather in US mainland there has been a drop in demand for heating gas that affected blue flame gas quotes in its turn. Thus, January 10 through February 10, 2017 the March gas futures price dropped from 3.278 USD per one million BTU to 3.035 USD per one million BTU.

In its turn DGAZ, an exchange-traded note chosen as our instrument for natural gas investment, gained 12.9% - from 4.12 USD on January 10 to 4.65 USD on February 10, 2017.

At the present moment various weather bureaus including the reputable National Oceanic and Atmospheric Administration (NOAA) are forecasting an even warmer weather up to the end of February in the key regions for gas consumption such as the East Cost of the United States, the Great lakes area and the Unites States Gulf Coast.

Thus, we confirm our December forecast for further decrease in price for gas contributing to further increase in assets value of the WellMax investment portfolio.
As we had forecasted in the previous review, the last month`s oil price settled flat in a narrow range between 53.6 to 56.8 USD per Brent barrel. The monthly oil market report of the International Energy Agency supported the price as it announced OPEC`s promise to cut oil output fulfilled for 90% in January.

According to the report, in January 2017 OPEC`s total oil output dropped by 1 million barrels per day to 32.06 barrels per day. Angola, Qatar and Saudi Arabia were the most active countries as they exceeded the target by 40%, 30% and 16% respectively.

Among countries following the agreement there are ones which are not members of OPEC, including Russia cutting oil output by 100 000 barrels per day in January, according to the IEA, that is a third part of the agreed 300 000 barrels per day.

Despite the reputable independent agency confirming OPEC`s commitment to the reached agreements, the market didn`t respond with soaring prices.

In the first place investors are concerned about increasing oil output in the USA, Canada and Brazil, which will gain 750 000 barrels per day at year-end 2017, according to the IEA`s report.

According to the data of the US Department of Energy, in early February oil output accounted for 8.978 million barrels per day, which are the highest figures since April 2016. With regard to intensified drilling activities in the USA, it is most likely that the output will keep growing.

Besides, it will be rather difficult for OPEC to keep this high figure (90%) for the following five months. Libya and Nigeria may complicate the task, as they are relieved of a necessity to cut output due to its drop caused by wars and political disturbances in both countries. Considering possible increase in production in these countries, the total figure may drop to 70% and lower influencing price for “black gold”.

According to many investment analysts including ours, it is highly possible that oil will sharply leave this price band. At the present moment a downward trend looks more possible, however, if positive market news, such as complete implementation of the Vienna agreements, prevails, an upward trend of oil price will be possible as well.

A relative high price for oil in the fourth quarter of 2016 and in early 2017 positively influenced the Russian national currency rate. However, in case of the downward price trend in oil market, the rising ruble may go down due to weak macroeconomic data.

In 2016 retail turnover kept decreasing. According to the results of the year, turnover dropped by 5.2% and amounted to 28.1 trillion rubles (in 2015 retail sales decreased by 10% compared to 2014).

Much of decrease in retail turnover was caused by the third in a row year of falling real income of Russians. Following the results of 2016 it dropped by 3.2% in comparison with 2014). Construction sector turnover also posted negative growth of 4.3% compared to 2015 (in 2015 a 4.8% fall compared to 2014).

Industry and agricultural sectors had positive growth in 2016, but several reservations should be made here. Industrial production index dropped by 3.4% in 2015, gained 1.1% in 2016, however, the most contribution was made by the positive trends in extraction of mineral resources (+2.5%). It`s rather possible that they will go the opposite way in 2017 due to cutting oil output arranged by OPEC and other producing countries including Russia.

Agricultural sector gained 4.8% following the results of 2016 (+2.6% in 2015), however, Russia`s food embargo of 2014 should be taken into account. The question of the Russian agricultural growth prospects in case of food import liberalization remains open.

From the statistics data, it follows that Russian economy has been challenging, and as it was mentioned above, if oil quotes drop, ruble may not only stop its further growth, but even lose the current level.

In the last month there has been especially much news from the USA as their new president Donald Trump keeps making headlines of all international newspapers. The bright start of his office made many investors worldwide feel uncertain for furthers prospects of the American economy.

However, suspended Trump`s decree on immigration clearly showed that the principle of separation of powers is still in effect, and the President is only the head of the executive branch which can be successfully kept within limits by the judiciary and legislative branches.

A phone conversation between the US President and the Chairman of the PRC is also noteworthy, as Mr. Trump promised China`s leader Xi Jinping to follow the One-China policy. Besides, Trump`s further statements relating to China were more measured and peaceful than ones during his electoral campaign. Thus, one may talk of initial sagging tension in relation between the two biggest world economies, though at the present moment possible conflict escalation cannot be excluded.

It is early to conclude about future directions of the US domestic and foreign policies until all members of Donald Trump`s Cabinet are confirmed by the Senate in their offices. However, the existing check-and-balance system of the US proved to be efficient through the decree situation, so it is unlikely that any abrupt turnabouts can be possible in American politics. It convinces investors that American economy is stable and reliable.

Most probably, we will face a turbulent period of increased volatility in worldwide markets when the participants will have to take quick investment decisions based on deep and accurate analysis that are and always have been the strongest points of International Financial Community and its team.