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Nonresidents Leaving Russian Stock Market
The Russian stock market was highly volatile last week. On Tuesday, the RTS index sank to 1800 points. The high for the week was 1880 points and it ended 0.2 percent higher than it began, with 1864.74 points. The MICEX index lost 0.2 percent and ended at 1634.1 points. Activity was low and declined throughout the week. Trading on the RTS averaged about $50 million per day last week, sinking to $23 million by Friday. On the MICEX, it averaged 42 billion rubles per day, with 36 billion rubles on Friday.
Market insiders say that problems with liquidity were to blame for the low level of activity. Foreigner bought hard currency, mainly from the Central Bank, for export, causing rubles to concentrate there and leading to a deficit of them on the interbank market. Russian assets were also sold actively, in order to transfer the funds to more reliable instruments. According to Emerging Portfolio Fund Research data, funds that invest in Russia and the CIS took $76 million out of the area during the week ending August 22. In the week previous to that, they made $4 million in new investments.
The mood on the market was set by expectations that the U.S. Federal Reserve Board would soften its monetary policy further after lowering the discount rate by 0.5 percent on August 17. RAO UES of Russia stock fell all week. Insiders said that investors were getting rid of the stock before the register was closed of shareholders qualified to take part in the extraordinary shareholders meeting on October 26 at which the second reorganization of the electricity giant will be considered. Norilsk Nickel gained 8.4 percent in the course of the week, thanks to events on the nickel market. Three-month futures rose 6.5 percent to $27,700 per ton.
www.kommersant.com
All the Article in Russian as of Aug. 27, 2007
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