The dollar exchange rate increased by 1% this week. Its upward climb was blocked by the Central Bank, which announced it would buy dollars at 30.6 rubles. The dollar was fairly confident on world currency markets, while ruble liquidity improved on the Russian market and the IBC rate fell below 3%. According to Yuri Petrovich, an analyst at Guta Bank, the dollar is growing thanks to speculation, as banks closed their shorts.
This week’s increased ruble liquidity also had an immediate effect on the state ruble bond market. Market players became noticeably more active and the quotes for the majority of issues went up. However, this optimism proved short-lived: a weaker ruble made ruble-denominated investments less profitable. With the beginning of autumn, sellers perked up and prices began to fall. The week saw many initial placements. The Ministry of Finance held an auction September 3^rd, and just a day later the Central Bank offered securities from its own portfolio.
The sub-federal and corporate bond market had a rough week. Investors lost interest in ruble securities and sales increased this week, due to a stronger dollar (which grew by 30 kopecks versus the ruble in the last two weeks) and the excessive number of initial placements, estimated at 70 billion rubles. “The exceptions were the Uralsvyazinform and Sibirtelekom bonds placed last month with a market premium of 100 base points. Their quotes rose to 100.5-101 percent of face value, and trading exceeded a billion rubles,” recounted Anastasia Shamina, an analyst at Zenit Bank. Two bond issues were placed on the primary market: Nizhnekamskneftekhim attracted two billion rubles, and Yakutskenergo 400 million.
A positive attitude prevailed on the Eurobond market during the first half of the week. However after a small break on Monday for Labor Day in the US, the market started to slip downwards. The rally on the world’s stock markets drew funds away from the bond segment. The wave of sales mostly involved US foreign debt, but Russian bond prices fell along with them.
The RTS, Russia’s stock index, reached new heights this week, flying past 550 points. But it couldn’t hold on and on Wednesday traders decided to stabilize their profits. The correction came with the end of the period for ADR holders to bid on the YUKOS stock buyout. Nonetheless, according to Yuri Makeyev, an analyst at IT Invest, despite the obviously overheated market, the future looks bright for stocks. The majority of resources YUKOS stockholders will get from the buyout will be reinvested in the stock market, and the demand for Russian stocks will hold. Among those leading the market this week were stocks that have not been favorites for quite some time, Sberbank and Surgutneftegaz, gaining10% and 7.7% respectively. With nickel prices on the rise again, Norilsk Nickel saw its shares go up by 8.4%.

The Financier’s Date Book

September 9 EFKO places 0.8 billion rubles in bonds
September 11 ATsBK Invest places 0.5 billion rubles in bonds
September 16 Tsentrtelekom places 2 billion rubles in bonds
September 16 The Russian Textile Alliance places 0.5 billion rubles in debt securities
September 24 OPEC meets
September 27-October 3 The International Conference on Developing the Banking Business in Russia held