Actuality summer 2007 (august 6)

Not residents leave the Russian market

The last week the Russian market demonstrated again high unsteadiness of auctions.

On Tuesday the RTS (Russian Trading System) index lowered close to the mark of 1800 points.

The highest achievement of the week was

the mark of 1880 points. However, according to the results  of the week the index added only 0,2% and was closed on the mark of 1864,74 points.

The Index for that time lost 0,2%, having lowered to the mark of 1634,01 points.

The frequent change of moods was accompanied by low activity of participants of market, that sharply went down by the end of the week. If within the week daily transactions in the section of the classic market of RTS made about $50 million on the average, on Friday the volume of auctions lowered to $23 million. On The Stock Exchange Moscow Interbank Currency Exchange on Friday the volume of auctions made less than 36 billion roubles at a middle daily volume about 42 billion roubles for a week.

According to the participants of auctions, the principal reason of decline of activity at the market of actions was a problem with rouble liquidity.

Not resedents actively bought currency back for a taking out abroad mainly at Central bank (further CB). As a result roubles went foremost to CB, intensifying the deficit

at the interbank market. In addition, they actively enough sold Russian actions, transfering facilities into more reliable papers. During the week ended on August, 22 2007, funds

investing into Russia and countries of CIS took out $76 million against $4 million, which were invested the week before.

The whole week foreign investors were basic salespeople, because in spite of low levels, which domestic companies bargain on, the crisis in financial sector did not pass yet.

A new outflow of facilities can begin in the near time, because the season of vacations ends and newly arrived investors

can fill up the rows of people interested in taking money out of funds.

During the week basic influence on the moods of investors was exerted by expectations of further actions of about the monetary policy

of the country.

After the decline of registration rate of of the USA for 0,5%, which was produced on August, 17, investors expect the further softening of monetary policy. By the end of week probability of decline of the base rate of Federal Reserve Service grew to 99% at the nearest meeting in September.

The futures on a rate is bargained at the level of 5%. However, the row of experts supposes, that during the nearest time the rate will be lowered at once for 50 base points, i.e. to 4,75%. Expectations of softening of monetary policy in the USA are already put in prices,

the raising up of the European markets at the beginning of week is the evidence of. Similar expectations can be superfluously optimistic and provoke new wave of correction in case if Federal Reserve Service doesn’t begin to reduce base interest rate in September.

During the week the shares of «Norilskiy nickel» were in high demand quotations of which grew for 8,4% during the last week. Support to the papers of company was rendered by development of situation at the market of nickel. For a week the cost of three months futures for metal on LME grew for 6,5% to $27,7 thousand for a tone. «The price advance of basic products (the stake of nickel in the the mining and smelting complex gains exceeds 50%) stimulated investors to buy shares of the largest Russian producer of this metal, which were falling before that.