The Russian equity market was relatively flat yesterday ahead of weekend elections. It drifted for most of the day and ended down 1.1%. There seemed to be little aggressive selling and in fact limited buying was seen in LUKoil, Yukos and the Gazprom ADS. The local Gazprom shares were slightly weaker (-0.1%) but on significantly lower-than-normal volume. Big movers were MTS, which fell 6% on the news that Leonid Reiman was appointed Deputy Minister of Communications, along with Vimpelcom, down 3.5%.
Russian Eurobonds were lower yesterday in line with global emerging debt markets. The EMBI+ Russia Index lost 0.3% with its spread widening by 3 bp to 263. The domestic debt market was higher, boosted by the ample rouble liquidity and demand unsatisfied at the OFZ auction. MinFin provided a small yield premium at the auction for OFZ 46002 but cancelled the OFZ 27024 auction, considering the bids unacceptable.