OREANDA-NEWS. Fitch Ratings has revised its 2016 sector outlook for Russian and former Soviet Union (FSU) rail transport to negative.

The negative outlook reflects the pressure from continued weak market fundamentals on freight transportation volumes and rates and weak local currencies. We expect further pressure on volumes and rates in most FSU countries in 2016 as weak demand for rail services continues, exacerbated by increasing use of pipelines for crude oil transportation. However, lower rail fleet production coupled with gradual disposals of older fleets could potentially result in a recovery in rail fleet rates in Russia.

We have also revised the 2016 rating outlook for Russia and FSU rail transport to negative as we expect financial profiles to weaken on the back of deteriorating economies. The ratings of the majority of the rated Russian and FSU rail transport companies have Negative Outlooks, although some of them mirror that on the sovereign.

The presentation, entitled "Russia and FSU Rail Transport: Macro Drivers Pressure Ratings", is available at www.fitchratings.com.