The Russian market continues to look far better than most indices of the developed and developing countries.

The American and European indices closed in the easy hole for a week

December, 17-21, and most markets of BRIC, except Russia, fell down by 1 – 3%.

The correction on the Russian stock markets, which began a week before, didn’t develop farther. RTS index began to win back the lost positions when it found support at the level of 2250 points. The locomotives of growth became the most liquid securities of the first echelon, advanced growth of RTS index shows it.

Meantime activity and trade volume on the market have decreased a bit, that says about the investors’ caution in the conditions of unsteady situation on the leading world  stock exchanges.

For a week December, 17-21 RTS index grew by 1,17% up to 2296,09 points (2269,53 points on December, 14). The stocks’ index of the second echelon grew by 0,66% up to 2520,98 points (2504,52 points on December, 14).

This time the growth leaders on the classic RTS market became the common stocks of JSC Silvinit that grew by 15,15% up to $760, the common stocks of OJSC Razgulay Group that grew by 14,26% up to 6,25 dollar, and common stocks of OJSC KAMAZ that grew by 9,89% up to $5 for a week.

The RTS outsiders in the examined period became the common stocks of OJSC Ivanovskaya Power Sales Company which price reduction totaled 16,67% up to $0,0125, the common stocks of  JSC Chelyabinsk Zink Plant lost 9,45% up to $11,5, and the third failure of the week are the preferred stocks of  JSC Bashneft that fell down by 6,78% up to $11.

Trade volume on the classic RTS market for the examined time period totaled $342,3 million. The turnover leaders became the common stocks of OJSC MMC Norilsk Nickel with which were made bargains for the total sum of $74,280 million for a week (21,82% from the total trade volume on the classic RTS market), on the second place are the common stocks of JSC Gazprom with the result of $57,105 million (16,78% from the total turnover), and the common stocks of JSC Savings Bank of Russia which have been traded on the classic RTS market for $56,144 million (16,49% from the total volume of transactions). Remarkable fact: first for a lot of months the securities of RAO UES of Russia didn’t enter the leading three of turnover.

In the investors’ spotlight on the external markets is still

the USA economy and fears concerning deceleration of the economy growth rates. “Increase of inflationary pressure in the country, about which testify the latest data on inflation, together with the expected deceleration of economy contribute to the talks about recession and even stagflation in the USA more frequent.

The inflation increase makes the decrease of basic rate a less probable scenario that is reflected in the American currency rate, which turned firm against euro almost by 0,4% and reached 1,436 for a week”, reasons Vitaly Lakeev, the analyst of REGION Group.

Last week one of the key events on the western markets became the report publication of the leading world banks for the 4Q, the majority of which disappointed investors. Only the report of Goldman Sachs turned out better than expected, meanwhile Morgan Stanley and Bear Stearns got record losses over their history as the result of the new write-offs of depreciated mortgage assets.

In Russia on the last week of December, 17-21 the securities of oil and gas sector and also some stocks of engineering (car factories) looked better than market: relevant branch RTS indices grew by 1,5% and 3,7%.

Some companies’ stocks of auto industry have shown the leading dynamics among the securities of engineering industry. So, the stocks of AvtoVAZ grew almost by 6%, and the securities of KAMAZ went up by 8% and closed on the historical maximum over RUR125 per stock.

The publication of the audited statement by international standards for 2005—2006 caused the stocks buy of KAMAZ, that very pleased investors. The consolidated yield of the largest Russian truck manufacturer grew by 39,7% for 2006. Thus, the company could substantially improve profitability because of more restrained rate of costs growth.

So, operating profitability grew from 4,9% up to 7,7%, and profitability by EBITDA attained 10,7%. In 2006 KAMAZ gained net profit 51% more than in 2005.

Last week quite a good dynamics have shown also the stocks of GAZ, which went up by 7%. The company declared about excellent production results according to the results of nine months of 2007 that testify to continuation of dynamic growth of sales on practically all activity directions.

GAS reported also that according to the year results the profit can attain RUR150 bln that exceeds expectations of the market a bit.

Most securities of bank sector for a week December, 17-21 increased by more than 1% on the average. The main event for the Russian bank sector became information about forthcoming realization of call option for a purchase of 30% Rosbank for $1,7 bln by the French group Societe Generale.

The transaction, during which Frenchmen will become the holders of controlling stock interest of one of the largest retail banks of Russia, should be concluded in February next year. Thus Societe Generale would propose all minority stockholders of Rosbank an offer for retirement of securities that belong to them. Judging by the option cost, the cost of stocks redemption should total $7,9 (RUR193), that turned out 10% higher than market value of securities the day prior to information. According to the week results the securities of Rosbank went up by 5%.

VTB stocks, that added 6%, also became one of the growth leaders among the bank sector securities.

However traders don’t exclude that structures, close to the bank, render support to VTB stocks.

In oil and gas sector stand out the stocks of Gazprom Neft, that went up almost by 10% for a week. Information about forthcoming placement of half of Tomskneft under its control rendered support to the company securities. However, Gazprom Neft doesn’t hurry to become the share holder, not to raise the company cost on the background of the forthcoming option realization with Eni and Enel on redemption of 20% Gazprom Neft stocks bought during Yukos bankruptcy.

This transaction, certainly, increases Gazprom Neft cost, however taking into account growth from minimum values this year the stocks of Gazprom Neft, perhaps, for  75% approximately are already adequately estimated by the market and scarcely have serious growth potential.

In the metallurgical sector vigorous growth have shown the stocks of Severstal that increased by 5% on the high trade volume for a week. Probably, investors expect the good company results, as Severstal is fully provided with own raw material. On the background of the favorable pricing environment on the market of coal and coke the securities of coal companies are continue to be in demand. So, the stocks of Belona and Raspadskaya grew by 17% and 8% accordingly for a week. The increase of securities quotations

of Belona is also connected with the publication of strong production data for 11 months – the total coal mining has increased by 43% as compared to the l ast year analogical period.

In the energy sector one of the important events of the week became the board of directors of OGK-6, which confirmed the offering cost of additional issue of stocks in the amount of 44,3% from the current authorized capital of the company at the level of RUR3,8 per security, that is 20% higher than market quotations. The basic volume of the issued stocks will fall to Gazprom which will redeem 46,6% emissions. However, as the stake of Gazprom in OGK-6 capital will not exceed 30% in that case, minority stockholders don’ t need to hope for an offer. So the securities cost of the company didn’t practically change for a week.