The equity market yesterday was solid, rising 2.1% on volumes 50% higher than average. Yukos (+4.2%) was a standout performer after Khodorkovsky?s fence-mending comments of the day before. With political risk perhaps reducing around the company, the fundamentals have an opportunity to come through. Sibneft also did well, rising 2.7%. UES was down (-1.6%) on further rumours that cash will be an option in the divestment auctions while Sberbank kept its gains of Monday. Vimpelcom reached new highs, although MTS eased somewhat after its strong recent run.
Russian external debt was stronger yesterday in line with most global emerging debt markets. The EMBI+ Russia index added 0.2% with its spread tightening by 4 bp to 251. In separate news, S&P has upgraded MMK?s rating from B to B+. The MMK 08 Eurobond gained 0.7% yesterday notably outperforming the market. Domestic debt market remained flat and fairly inactive again as the main players ? Russian banks, prepared for the end of the month and quarter.