Of all negative factors, weaker prices for crude oil were, perhaps, of the greatest effect for the market of Russia.
Photo: Vasily Alexandrov
| Other Photos |
 |
|
 |
Oil, Stock Exchange Have Vast Growth Potential
Russia’s market proceeds with its bottom-sinking attempts. The investors are yet unable to forget the summer witch-hunt in the metal sector and the geopolitical war that drove indices down the victory of Russia notwithstanding.
Of all negative factors, weaker prices for crude oil were, perhaps, of the greatest effect. Investors were looking forward to the news from the Vienna Congress of OPEC nations, which were in no hurry to come up with a statement.
The long-awaited announcement was made late at night. OPEC retains current quotas on oil extraction, and this decision fueled Brent prices this morning. But the yesterday’s decline below $100/bbl was a vital negative signal in psychological terms.
What’s more, Russia’s Foreign Minister Alexei Kudrin made clear yesterday his opposition to easing the tax burden on oil companies in 2010, having challenged, in fact, the recent tax initiatives of Energy Ministry.
This morning, however, Kudrin expressed readiness to study all proposals for further tax benefits related to the oil and gas sector.
The drop in oil prices to $100/bbl is nothing else but the rollback to the April level after the speculatively-heated rally and the prices that OPEC finds comfortable and acceptable.
The tricky point is that the oil prices fell to the April low, while the market in Russia slumped to the level of September 2006. This discrepancy signals that the response of investors is excessive and the market is driven more by the physiological factor. Anyway, domestic investments might gain momentum, overlapping the outflow of nonresident capital from financial market of Russia. Nowadays, the growth in the worth of Russia’s assets is far behind the growth in the worth of alternative kinds of investments.
According to analysts, this situation allows to predict the growth in the capital overflow from alternative markets to financial assets, which potentially, may emerge as the most yielding on investment horizon of two or three years. The market will continue to go down only if pressurized by some fundamental changes, such as the slump in oil prices or vital political news, the analysts speculate.
www.kommersant.com
|
|
|
