May 27    - YUKOS announced that it could go bankrupt before the end of the year. The company’s shares lost 11.2%.
                 - Gazprom announced plans to reorganize the company.
                 - The OPEC countries are considering proposals to suspend oil production quotas.
                 - Vympelkom released its first quarter results for 2004 according to US GAAP. The company’s net profits versus the same period last year increased by 84%, while earnings only increased 71%. The company’s ADR quotes fell by 3.7%.
May 28    - The Transneft board of directors recommended earmarking 13% of the company’s net profits to pay dividends.
                 - Minister of Finance Alexei Kudrin came out in opposition to settling the conflict with YUKOS outside of court, which increases the likelihood the company will go bankrupt. YUKOS shares lost 9.4%.
                 - The Ministry of Industry and Energy accused the TNK-BP subsidiary Samotlorneftegaz of violating the Law on Mineral Resources.
May 31    - Standard & Poor’s revised its ratings forecast for Sibneft, making it negative. The company’s stock lost 3.8%.
                 - Yuganskneftegaz, a subsidiary of YUKOS, gave guarantees to YUKOS regarding two loans made to the subsidiary and totaling $2.6 billion.  YUKOS shares gained 2.4%.
                 - The Moscow Arbitration Court upheld the ruling that YUKOS’ issue of additional shares was invalid.
                 - Tatneft took a loan to pay off its Turpas shares.
June 1      - The Moscow Arbitration Court rejected the State Communications Inspection’s complaint against Vympelkom. The company’s ADR gained 0.8%.
                 - The Novolipetsk Metal Works plans to increase the share of its stock in circulation by 1-2%. This could be the first step toward an initial public offering for the company.
                 - OMZ head Kakha Bendukidze announced that he is leaving the company, having accepted the post of Minister of the Economy in Georgia.
June 2      - Norilsk Nickel released its annual report for 2003 according to international standards.

Last week, the dollar made some moderate gains, as early in the week it increased by a kopeck and on Wednesday it leaped up by four to 29.05 rubles to the dollar. The favorable ruble liquidity situation helped the dollar rise, and toward the end of the week, correspondent accounts grew to $160-165 billion and the one-day IBC rate fell on Wednesday to 6-7%.
The domestic ruble bond market saw some half-hearted purchases, and the yield on GKOs and OFZs fell by 0.4%. The tense liquidity situation during the first half of the week kept investors from active trading. Daily trading volume only totaled 320 million rubles, or 30% lower than the average for last month. The mid-week increase in the ruble supply brought some relief. Apparently, the majority of resources moved to the currency market due to the dollar’s rise versus the ruble. In addition, the 18 million-ruble placements planned for Wednesday did not allow things to heat up on the secondary market.
The market for sub-federal and corporate bonds continued to drift downwards. Prices for corporate bonds fell by an average of 0.3% for the week, while top-tier bonds fared even worse, losing an average of 0.4%. Sub-federal bonds stayed put at their previous levels.
The increase in prices from the week before on the foreign debt market did not continue this week. Eurobonds slipped downward after the regular installment of macroeconomic news from the US was announced. The negative atmosphere surrounding YUKOS also encouraged investor pessimism and hit non-government bonds particularly hard. As a result the yield on the benchmark Euro-30 issue increased by 13 base points for the week, while the yield on Gazprom bonds increased by 27 base points.
The RTS Index lost 7.4% for the week and once again sank below the 600 mark. All of the blue chips without exception ended up with losses. YUKOS led the way, losing a fourth of its market value. Norilsk Nickel prices fell by 13.3% and Surgutneftegaz lost 10.8%. Tatneft and Gazprom fared comparatively better, losing only 4.8% and 6.3% respectively. On Wednesday the market saw a slight upward adjustment. Among the blue chips, only Norilsk Nickel continued to fall, as apparently investors were not pleased with its annual report.

The Financier’s Date Book

June 8   -  The City of Ufa places 0.5 billon rubles in bonds.
June 9   -  Auction to privatize Krivorozhstal
              - Probiznesbank places 0.8 billion rubles in bonds.
June 10 - Baikalvestkom and Globus Leasing Finance place 300 and 400 million in bonds respectively