May 7 - The Moscow Arbitration Court scheduled hearings for the YUKOS case to begin May 14th. The day before, investigators again searched the company. YUKOS stock lost 8.7%.
May 10 - Saudi Arabia called for OPEC to increase quotas by 1.5 million barrels per day. The cartel will make its final decision at a conference in Beirut on June 3rd.
May 11 - The French oil company Total confirmed plans to buy a stake in Sibneft after the company splits with YUKOS.
May 12 - Sberbank stock will be included in the MSCI (Morgan Stanley Capital International) Index after trading closes on May 28th. Sberbank shares gained 8.8%.
              - The courts once again denied requests by his lawyers to release Mikhail Khodorkovsky on bond.
              - The Novolipetsk Metal Works announced good results for the first quarter of 2004 according to Russian accounting standards.
              - Mikhail Fradkov announced that no decisions will be made regarding united generating companies (OGK) at the RAO EES board of directors meeting scheduled for May 21st.
May 13 - Sibneft confirmed plans to increase production in 2004 by more than 20%, despite disappointing results for the beginning of the year.
              - The Central Bank recalled Sodbiznesbank’s license and appointed a temporary administration.
              - RAO EES has submitted an appeal to the Supreme Arbitration Court of the Russian Federation regarding the ruling that the Sayano-Shushensky Hydroelectric Plant was privatized illegally.
              - The Ministry of Economic Development proposed that RAO EES lower dividends. By the end of trading, the company’s shares had fallen by 4.7%.

Over the last week, the dollar gained 18 kopecks to reach a four-month high of 29.06 rubles to the dollar. The increase in the exchange rate was once again due to a stronger dollar on world currency exchanges. In addition, the dollar also benefited from greater ruble liquidity. Compared to recent weeks, correspondent accounts increased slightly, though they remained low at 154-167 billion rubles, and the short-term IBC rate fluctuated between 3.5-6.5%. On Tuesday, the Central Bank put a damper on market players’ bullish mood by selling dollars at 29.02 rubles to the dollar. By week’s end, trading slackened, as did the dollar’s growth rate.
After the May holidays, investor activity picked up considerably on the domestic ruble bond market. As the ruble fell, sales predominated and the weighted average yield on GKO and OFZ bonds rose by 15 base points. Mid-length issues fared the worst, as yields increased by 0.6-0.7%.
The corporate and sub-federal bond markets also saw prices fall, while trading was lighter than usual. The price of corporate bonds fell 0.8% on average for the week, with top-tier bonds losing 1.3%. In the sub-federal segment, prices fell by an average of 0.9%, and yields on 31st- and 24th-series Moscow municipal bonds increased by 90-100 base points.
Last week started out with growth for Russian eurobonds, which took their revenge for the massive declines of the previous trading days. The higher prices affected all developing markets. Strong manufacturing figures from Brazil also encouraged investors to buy emerging market bonds. By the end of the week, however, news of higher prices for US producers increased concerns that interest rates would rise relatively soon. As a result, prices for Russian eurobonds fell by 0.3-0.5%.
This week on the stock market was marked by a substantial increase in volatility. In the first half of the week, the RTS Index fell by 4.1%, below 600 points, but by week’s end, buyers reappeared on the market. As a result, the RTS grew by 3.3% to 595.7 points, making up for part of its losses in relatively heavy trading. Tatneft, Rostelekom, and RAO EES were this week’s outsiders, losing 9-9.35%.

The Financier’s Date Book

May 18   The case brought against Surgutneftegaz by its minority shareholders will be reviewed in provincial arbitration court
                Krasnodarsk Territory will place 605 million rubles in bonds

May 20   Volgograd Province will place 600 million rubles in bonds and Tattelekom 600 million

May 21   Severstal annual shareholders meeting
                RAO EES board of directors meeting

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