S&P raises Veles outlook to positive

Standard & Poor's said it revised its outlook on Veles Capital LLC to positive from stable.

At the same time, the agency said that the CCC long-term and C short-term counterparty credit ratings were affirmed and the Russia national-scale rating was raised to ruBB- from ruB-.

The outlook revision reflects the company's growing business diversification, particularly through fixed-income trading and asset management, which should positively affect its financial profile through a more balanced revenue structure, S&P said.

The agency added that the ratings reflect Veles' high exposure to the volatile and thinly traded Russian capital markets, low revenue diversification, poor capitalization and relatively weak financial flexibility while these negative factors are partially mitigated by the company's good franchise in the domestic "veksel" (promissory note) market, stable management with focused strategy and Russia's improving macroeconomic environment.

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