07 June 2004 09:58
Banking sector crisis fears hold back gains
MOSCOW. June 7 (Interfax) - A liquidity deficit in the banking sector due to fears of a possible crisis held back
gains on the Russian stock market Monday.
Yukos and Norilsk Nickel led the market up with prices on the RTS climbing 5% to $7.85 and 4% to $49.4,
respectively.
International stock indexes are growing, there is demand for Russian Eurobonds and oil prices remain high, despite
OPEC's 2 million barrels a day quota hike (analysts do not expect prices to drop below $35 per barrel in the near
future), traders said. However, increased interbank loan market rates on the domestic market prevented greater
gains.
The market saw most of its gains in the morning and then the market entered a sideways trend, said Yevgeny Volkov of
MDM Bank. There was a second wave of growth in the evening amid gains on Wall Street.
"Every day there are new rumors about a possible banking crisis, and this is taking its toll on investor mood.
Some banks have started closing limits on each other, which is having a negative impact on monetary liquidity and
interbank loan market rates are climbing. Even a statement from the Central Bank saying that if there were a problem
with liquidity, the monetary authorities would refinance the market, and an Interior Ministry statement refuting the
existence of any black lists of banks, suspected of financial crimes, have not completely calmed down investors. As
usual the market tends to react the opposite way to all official statements about a lack of problems in the banking
sector," he said.
Norilsk Nickel shares were locally oversold on Friday due to fears that the publication of information on nickel and
copper reserves at the company's main deposits would not justify forecasts, Volkov said. "The market over
emotionally reacted to the release of data on Norilsk Nickel reserves, but after they actually appeared the situation
began to improve and share quotes climbed," he said.
Trading volume totaled $24.593 million on the RTS (including
$14.761 million in direct deals), and 12.998 billion rubles on the
Considering current production volumes of about 240,000 tonnes of nickel a year, Norilsk Nickel is ensured proven
reserves for about 27 years, which is a rather high indicator by international standards, Bank of Moscow analysts
said.
Yukos began to gradually pick up due to an absence of any more bad news about the company and prices rose to levels
seen over a week ago.
On the RTS, prices went up 3.2% for Unified Energy System, 1.5% for Lukoil, 1.7% for Rostelecom, 1% for Sberbank,
0.8% for Sibneft, and 2.1% for Surgutneftegas.
The RTS stock index went up 1.55% to 576.27 points.
The MICEX composite rose 2.73% to 536.53.
MICEX.
Gazprom shares on the St. Petersburg went up 1.3% to 56.21 rubles in volume of over 13.784 million shares.
The S&P/RUX composite ruble index climbed 1.71% to 716.66, and the index in dollars added 1.78% to 146.95.
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