USD 65.9961

0

EUR 73.2227

0

BRENT 59.28

+0.59

AI-92 42.19

0

AI-95 45.95

-0.01

AI-98 51.74

+0.01

Diesel 45.78

-0.02

14

RUSSIAN MARKET NEWS UPDATE MARCH 25th

The profit-taking seen earlier in the week...

The profit-taking seen earlier in the week resumed yesterday. Aggregate recorded volume of $768 mn remained in the steady range seen all week. The benchmark RTS Index fell 1.1%, but held above the 700 landmark which is providing the expected support ? as seen in a rally towards the close. There are no signs here of a more serious correction from the highs reached in last week?s post-election rally. The domestic liquidity cushion is as firm as ever, with the prospect of buoyant oil-related and capital inflows in the weeks ahead. The CBR has been forced to resume its rouble interventions in the FX market.

In this generally supportive environment, individual stocks follow their own path. Gazprom locals (+1.2%) continued to advance, touching a new all-time high on heavy volumes as the market buys further in to the share market liberalisation prospect. Yesterday?s main losers were Yukos (-2.2%) and Sibneft (-1.8%), reflecting the market?s dislike for the growing tension between them in the run up to Sunday?s Sibneft EGM. MTS (-2.1%) was buffeted by the volatile drift on Wall Street, while Vimpelcom (-0.2%) was spared ? but could fare worse today after the release of its 4Q results with their seasonal weakness. The unthreatening
overall situation was best captured by the fact that Sberbank, having led last week?s charge, remained comfortably flat on the day.

Russian external debt was marginally stronger yesterday. The EMBI+ Russia Index added 0.2% with its spread tightening by 2 bp to 261. The domestic debt markets were marginally lower yesterday due to the OFZ auctions and the forthcoming corporate placements. Vneshtorgbank will today auction Rb 5 bn worth of a five-year bond while Bank Zenit will offer Rb 1 bn worth of a three-year issue.