May 14 - The Moscow Arbitration Court postponed the hearing of the Tax Ministry’s case against YUKOS until May 21st.
              - The head of Total, Thierry Desmarest announced that his company is not negotiating to buy Sibneft. Sibneft shares lost 3.5%.
May 17 - Rostelekom reported its earnings according to Russian accounting standards for the first quarter of 2004. The market greeted the results positively and the company’s shares grew by 6.7%.
             - Gazprom released non-consolidated results for the first quarter of 2004.
May 18 - The Federal Energy Agency reported a substantial growth in oil companies’ financial indicators for 2003.
              - Deputy Minister of Economic Development and Trade Andrei Sharonov announced that discussion regarding Gazprom reorganization has been postponed until late July.
              - Surgutneftegaz released its results for 2003 according to Russian standards. The company’s stock grew by 0.4%.
              - Norilsk Nickel published its financial results for the first quarter of 2004, which led to a 2.4% growth in the company’s stock.
May 19 - YUKOS was informed by its creditors that a 1.5 billion-ruble loan could go into default.
              - YUKOS brought a suit to the Moscow Arbitrage Court against the Tax Ministry asking the court to overturn the ministry’s ruling that the company failed to pay $3.4 billion in taxes. By the end of the day, YUKOS shares had gained 0.05%.
              - Transneft released non-consolidated results for the first quarter of 2004, demonstrating a significant growth in profits.
May 20 - Leonid Reiman was appointed director of the newly reestablished Ministry of Information Technology and Communications.

Last week came under the sign of the stronger ruble. All told, the dollar lost ten kopecks, falling to 28.98 rubles to the dollar. Low ruble liquidity held up the ruble: the IBC rate rose to 11-12% p.a., and correspondent accounts stayed below 170 billion rubles. The dollar also began to weaken on world exchanges. Futures for June and July, which reflect market players’ expectations, traded at 29.1-29.2 rubles to the dollar on the MICEX.
The stronger ruble sent a signal to investors on the federal ruble bond market and buying resumed. However, the ruble liquidity deficit slowed the growth in prices. In total, prices for GKO and OFZ bonds grew by an average of 0.5% in light trading. The tense situation on the money market also affected the results of auctions to place additional tranches of two series of OFZs totaling 6 and 5 billion rubles. The first auction was declared aborted due to insufficient demand, and at the second auction only a fifth of the issue placed.
Trading on the corporate bond market was extremely light. Investor activity focused on more liquid issues. On average, prices for corporate and municipal bonds stayed where they were a week ago. Top-tier bonds grew by 0.4%.
An optimistic mood dominated the market for Russian foreign debt this week. The week began with rising quotes due to an upward correction on the US Treasuries market. On Wednesday, the events surrounding YUKOS added some intrigue to the market: news of a possible default put a notable damper on the market’s bull mood. However, the evening news of a YUKOS countersuit brought prices back to their previous levels. US macroeconomic data released on Thursday also supported the market. The Russian segment’s spread shrank by 29 points and the yield on Euro-30 bonds fell to 8.1%.
Stocks experienced noticeable growth across the board last week. The RTS Index grew by 5.7%. Sberbank shares surprised the market by gaining 12.8% despite the lack of any significant news. RAO EES and Rostelekom stock also saw substantial growth, 10.8% and 9.7% respectively. YUKOS shares demonstrated some degree of volatility and overall they gained 2.1%.

The Financier’s Date Book

May 25   Gazprom board of directors meeting
                The Agency for Mortgage Lending (AIZhK) places 1.5 billion rubles in bonds
May 27   Glavmosstroi Finance places 2 billion rubles in bonds

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