June 18     - Sberbank shareholders elected a new oversight council and expanded its authority. The council now has the right to remove the bank’s directors and name an interim acting president

                  - Severstal-Avto released its annual report for 2003 according to international standards and demonstrated an increase in earnings and profitability.

                  - LUKoil announced its preliminary consolidated results for 2003 according to US GAAP and showed an increase in earnings and net profits.

June 21     - Minister of Finance Alexei Kudrin informed the president that “cooperation was already underway” between the Tax Ministry and YUKOS. The company’s stock gained 6.9%.

                  - 36.6 Drug Stores purchased a drug store chain in Nizhny Novgorod

                  - Oleg Vyugin, Chair of the Federal Financial Market Service, announced that the market for Gazprom stock may be liberalized before the end of this year. Gazprom shares gained 4.4%.

                  - Kalina Concern, which produces perfumes and cosmetics, sold 95% of its shares in the Uzbek trading company, Palada Vostok, as part of restructuring.

June 22     - TNK-BP shareholders announced that the holding has begun restructuring.

                  - Gazprom released its consolidated results for 2003 according to Russian standards, which showed a substantial growth in earnings.

                  - The Turkish Supreme Court rejected the government’s plea to renew the deal to sell Tatneft a stake in Turpras.

Last week, all was calm on the currency market. The dollar exchange rate stayed put, and trading was minimal, falling by 20% versus average levels at the beginning of this year. The ruble liquidity situation was defused to some extent. Short-term IBC rates returned to the 4-6% range and, as a result of the return of funds as the Central Bank lowered the mandatory reserve rate, correspondent accounts grew by 26% versus last week. The big event this week was the Central Bank’s announcement of its exchange rate forecasts. According to the monetary authorities, by the end of the year the exchange rate will be 29.5-30 rubles to the dollar.
The measures on the part of the Central Bank to support bank liquidity had an effect on the federal ruble bond market. Sales of GKO-OFZ bonds stopped and long GKO-OFZ issues even gained 30-50 base points in price. Trading remained light, as unattractive rates and major tax payments last and this week kept investors away from the market.
The non-government bond market benefited most. The top banks that have not had any liquidity problems funneled funds freed up thanks to the lower mandatory reserve rates into top-tier corporate bonds. At the center of investor attention were Gazprom bonds and two Vneshtorgbank issues, which gained an average of 80 points. There was not much of a rally on the sub-federal market, however. Prices grew by an average of 15 base points.
After a dramatic rise in prices based on news regarding YUKOS, the sovereign eurobond market calmed down. By the end of the week, declines in the price of baseline securities also led to profit fixation on the Russian segment. The benchmark of the Russian market, the Russia-30, fell to 92.75% of face value, which was still higher than when the week began. The risk premium only changed slightly, as the spread on the Russian segment narrowed by 4 points.
A positive mood due to the president’s announcement regarding YUKOS gripped the stock market for three days. Afterwards, investors decided to fix their profits and the RTS Index fell on Tuesday to 609.3 points. For the week, the stock indexes remained in the black, and the RTS gained 3.8%. Norilsk Nickel and Sibneft shares also fared well, gaining 3.3-3.4%. RAO EES was on the outside this week, losing 1%.

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