May 21   - Semion Bainshtok proposed to hand over management of the oil export terminal in Vysotsk that currently belongs to LUKoil to Transnefteprodukt.
                - The Accounting Chamber completed its audit of the Chutkotka Autonomous District. According to the audit’s results, the region’s government offered $13.7 billion in tax breaks primarily to organizations connected to Sibneft. Sibneft shares lost 0.7%.
               - Russia and the EU signed an agreement regarding Russia’s entry into the WTO.
May 24 - The Ankara Civil Court prohibited the privatization of the Turkish company Tupras. Previously, 65.8% of the company’s stock had been sold to a consortium that included a company affiliated with Tatneft.
               - Gazprom announced plans to consolidate sales activity in its newly founded subsidiary, Mezhregiongazholding (Interregional Gas Holding). Gazprom shares gained 0.97%.
               - The Moscow Arbitration Court continued to hear tax officials’ case against YUKOS. The company’s stock lost 3.6%.
May 25  - The Turkish government announced plans to appeal the Tupras ruling.
May 26  - Putin addressed the Federal Council. The RTS Index rose by 1.8%.
               - Gazprom board of directors recommended dividends of 0.69 rubles per share for 2003.
               - The Arbitration Court ruled that YUKOS owed the state $3.5 billion. In the final minutes before the MICEX closed, the company’s stock fell by 5%. YUKOS lawyers plan to appeal.

Last week on the currency market, the dollar exchange rate fluctuated slightly around 28.97-28.98 rubles to the dollar. The ruble liquidity situation remained tense. One-day IBC rates rose to 14% p.a. and correspondent accounts sank to 126-128 billion rubles, the lowest level this year. The Central Bank kept the dollar from falling by buying the currency at 28.80 rubles.
Trading on the domestic ruble bond market was very light, and investors only perked up toward the end of the week. On Wednesday, trading somewhat exceeded the average. With the deficit in rubles brought about by major tax payments, prices fluctuated insignificantly and the weighted average yield on GKO-OFZs remained unchanged for the week.
Growth in top-tier corporate and sub-federal bonds changed to stagnation as the week progressed. For most of the week, trading remained light and the prices for corporate and sub-federal bonds changed outside the general trend. On Tuesday, the Mortgage Lending Agency (AIZhK) placed 1.5 billion rubles in bonds on the MICEX with a yield of 11.3% p.a. at maturity.
Investor interest in Russian eurobonds grew thanks to Russia’s entry into the WTO and in anticipation of a coming improvement in Russia’s sovereign credit rating to the investment level following the example of Kazakhstan. The market was also supported by upward trends among benchmark assets. As a result, Russia-30 bonds rose to 91% of face value and the Russian segment’s spread fell to a four-week low.
The stock market grew only slightly this week, and the RTS Index gained 0.4%. On the eve of the presidential address to the Federal Council, the market lost 2.1% as foreign investors sold off their shares. However, by the next day, the market had recovered its losses. YUKOS and Sibneft fared worst this week, falling by 7.9% and 5.1% respectively due to bad news. Sberbank also performed below the rest of the market, losing 4.3%. Tatneft and LUKoil ended up ahead, gaining 3.7% and 0.9%.

The Financier’s Date Book

May 31      Sakhalinmorneftegaz annual shareholders meeting
                   Sun Interbrew announces its results for the first quarter of 2004 by international accounting standards
                   The Moscow Arbitration Court will examine YUKOS’ appeal of the ruling that the company made an invalid additional stock issue.
June 2        The Ministry of Finance plans an additional placement of 8 billion rubles in OFZ 46002 bonds.
June 3        Extraordinary OPEC meeting in Beirut
  Sakhalinenergo and Saratovenergo annual shareholders meetings
June 5        Aeroflot annual shareholders meeting

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