Fire for Slump
The battle in South Ossetia has deprived Russia’s market of any hope for soon recovery. With all domestic news driving the market downward and all foreign floors benefiting from a rising trend, the analysts find it too difficult to make short-term forecasts for the local market.
Driven down by Georgia’s assault on South Ossetia, Russia’s market was declining all Friday. MICEX closed 5.25 percent down and RTS slumped 6.51 percent. Rosneft shed 7.81 percent, VTB lost 6.08 percent, Sberbank dropped 6.64 percent.
“Today’s situation couldn’t be compared with the Yukos case. Everything is graver now,” said KIT Finance top manager Sergei Zharov. “The situation is gloomier every day. It was the conflict around TNK-BP at first, than abruptly, around Mechel, now the Caucasus,” said Denis Fillipov from Renaissance Online. “The investors endeavor to reduce risks and minimize losses.”
Russia’s indices sank over 30 percent vs the May maximum. “The market hasn’t seen the large-scale adjustment of that extent for many years,” specified Ovanes Oganisyan, the key strategist of stock market at Renaissance Capital.
According to analysts, the slump would have been even more dramatic but for the long decline of recent weeks. “The indices lost just 5 percent to 6 percent, because the floors faced negative news (war in South Ossetia) when the market had been oversold already,” supposed Denis Novikov from Alliance Continental. “If such news had emerged in May, the one-day slump could have been above 15 percent.”
www.kommersant.com
All the Article in Russian as of Aug. 11, 2008
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