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The Full-Scale Attack
In another anti-crisis effort, the U.S. Federal Reserve slashed yesterday the key rate from 1.5 percent to 1 percent, i.e. to the rate of 2003. Stock exchanges soared 8 percent to 11 percent on expectations of cheaper loan facilities, while Russia’s floors boomed 12 percent to 14 percent. Gazprom and Rosneft, where VEB had been injecting the money, went up above the prices of bank’s first acquisitions.
Buoyed by the surge in raw prices, Russia’s indices led the market growth yesterday in the environment of global boom (but for German DAX that lost 3.53 percent on decline in Volkswagen quotes). Futures for WTI and Brent went up 5 percent to 5.5 percent, nickel grew 8 percent, copper rose 4.5 percent and aluminum increased 2 percent. Russia’s floors opened up Wednesday; MICEX grew by over 4 percent and RTS gained 3.9 percent in the first ten minutes of trading.
In addition to the global trends, Russia’s market is psychologically inspired by VEB. That bank has injected as much as 25 billion ruble to sustain the country’s stock market. RTS soared 11.9 percent yesterday to close at 644, MICEX went up 13.8 percent to 608.88. Fueled by the steady growth of the past two days, Gazprom and Rosneft soared above prices at which VEB had set to acquire them. Gazprom, for instance, grew by nearly 7 percent vs. October 17 to above 110 ruble. Rosneft went up to 97 ruble, 1 percent above the quotes of two weeks ago. But Sberbank is still the exception; this bank is quoted nearly 15 percent below the close of October 17.
According to the analysts, the optimism inspired by the slash of the Federal Reserve rate won’t last for long. The real driving force could be the data on the Q3 performance of the U.S. GDP, which will be released today, at 3:30 p.m. MSK. The statistics will show whether the rally will be short-term or the market will start ascending from the very bottom at last.
www.kommersant.com
All the Article in Russian as of Oct. 30, 2008
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