Early last week, the market turned actively against the dollar, which fell to 29.8 rubles to the dollar. “However, the Central Bank intervened fairly actively and held back the very speculative mood of market players,” notes Sergei Romanchuk, Director of the Conversion Operations at Metallinvestbank. “It soon became clear that such an active strengthening of the ruble was not part of the Central Bank’s plans and that there was reason to expect it would not be easy to get beyond the 29.80 mark.” The ruble liquidity situation remained good. The IBC rate for most of the week stayed at 2% p.a., and correspondent accounts reached 130 billion rubles by the end of the week. The most aggressive operators attempted to push for an exchange rate increase, and the dollar rose to 29.86. “In the coming week, more likely than not, the exchange rate will return to 29.80 after a minor increase,” believes Ivan Manaenko, an analyst at Veles Capital Investment Company.
On the federal ruble bond market, prices moved in various directions and trading was light. Demand focused on mid-term OFZ bonds. According to Alexander Potavin, Director of the Information and Analysis Division at Lefko Bank, no major events will occur in this segment and the market will remain weak for the time being. Upcoming bond placements, all at low yields of 7-8% p.a., will reduce investor demand as the end of the year approaches.
Corporate and municipal bonds continue to stagnate. The price of the majority of bonds fluctuated in the context of an overall downward trend as investors remained fairly inactive. Apparently, investors prefer to avoid any action while the direction of further market development remains unclear. Under such conditions, any sales tender led to lower quotes, with the corporate suffering worse than the municipal bonds.
The foreign debt market saw a decline in quotes. Following the weekend, an atmosphere of optimism predominated. However without American investors (due to Veteran’s Day), trading was light. “The increase in price of Turkish bonds had a positive influence on Russian bonds as well. The quote increase was also encouraged by the American five-year note auction (on Wednesday, November 12). High yields, the highest in the last six months, led to significant investor interest in this instrument,” explains Alexander Potavin. However, the price increase was modest, as the announcements of Russian officials continue to have a negative effect on the market.
The stock market remained sluggish due to the YUKOS Affair. The RTS index lost 2% this week. Outsiders this week were Sberbank, which lost 5% due to disappointing results for the first three quarters, and Norilsk Nickel, which lost 6%. “LUKoil’s shares fared slightly better than the market as a whole. LUKoil announced that they were negotiating with American ConocoPhilips to set up a joint venture. Oil prices also rose over the course of the week,” recounts Andrei Kuznetsov, Director of the Project Financing Division at Olimpiysky Bank. According to Mikhail Zak, an analyst at Veles Capital, minor speculation and frequent fluctuations without a clear trend will continue on the stock market for the time being.

The Financier’s Date Book

November 19 Dalsvyaz places 1 billion rubles in bonds and Tomsk Province places 0.4 billion rubles in bonds.

November 19 Sun Interbrew releases its results for the third quarter according to international standards

November 20 Amtel places 1.2 billion rubles in bonds

Mid-November Severstal releases its results of the first quarter according to international standards

November 26 Baltika release its report for the third quarter of 2003 according to the US GAAP.