August 6      - The Moscow Arbitration Court ruled that Yuganskneftgaz stock was frozen illegally. The company belongs to YUKOS.
                     - Putin meets with Gazprom chair Alexei Miller.
                     - The board of directors of the Verkhnesaldinsk Metal Production Conglomerate (VSMPO) and the AVISMA Titaniam-Magnesium Works approved the basic parameters of a stock swap.
August 9      - The Moscow Arbitration Court struck down YUKOS’s appeal that Tomskneft stock had been frozen illegally. The Ministry of Justice again froze Yuganskneftgaz stock.
                     - Krasnoyarskenergo increased its stake in the Krasnoyarsk Hydroelectric Station from 25% to 30% and avoided having its stake diluted by additional issues.
August 11    - YUKOS received notification of default on a $1.6 billion loan.
                     - Gazprom received several permits from the Ministry of Natural Resources to prospect for natural gas in Eastern Siberia.
                     - Fitch confirmed Russia’s long-term rating.
August 12     - The Moscow Arbitration Court refused YUKOS’s request to postpone payment of back taxes for 2000. The Ministry of Justice announced that the independent appraisal of Yuganskneftegaz will be conducted by the international bank Dresdner Kleinwort Wasserstein.
                    - According to Interfax, the Ministry of Economic Development may refuse to sell united generating companies directly. UES stock lost 1.5%.

The last three weeks were a time of rapid dollar growth. The dollar gained a total of 19 kopecks, and in the last week alone rose by another nine. The dollar grew stronger with the support or at least the silent blessing of the Central Bank, which periodically made bids urging the dollar on. There are also objective factors working for the dollar: the lack of attractive ruble instruments on the market and the raising of the prime by the US Federal Reserve. The high ruble liquidity also contributed to the higher exchange rate. Last week, the IBC rate did not rise above 2% and correspondent accounts fluctuated around $200 million.
The federal bond market is in its traditional August stupor. Trading volumes last week were in the narrow 235-324 million-ruble range, and quotes moved in various directions with only insignificant changes. The situation did not heat up even when 570.42 million rubles in coupon payments on OFZ 27020s came on Wednesday. In short, stability reigned on the market and to all appearances there is no reason to expect any radical changes in the near future.
The summer lull also hit the sub-federal and corporate ruble bond market. Though the total number of exchange deals involving corporate bonds increased somewhat last week, more than 50% of trades involved top-tier bonds. Third-tier bonds retained their low level of liquidity and only had a 20% share in trading. Among the most popular bonds were Gazprom-2, TNK-5, Alrosa-19, RAO UES, and VTB-4. There were no general trends in corporate bond prices for the week and any changes were minor. In the near future, the yield on corporate bonds will be defined in general by IBC rates and the changes in the dollar exchange rate.
Russian eurobond prices also moved in various directions last week. When the Fed raised the prime by 0.25%, it did not have a big effect on the market, as market prices already took that turn of events into account. However, on Wednesday prices fell dramatically. Euro-30s plummeted by 42 points thanks to bad news about YUKOS. By the end of the week, Russian eurobonds had regained some of their losses and the spread of the Russian segment shrank to 319 points.
The stock market was in the mood for speculation, supported by contradictory news about YUKOS. The RTS Index remained unchanged for the week, though it sometimes fluctuated by as much as 2%. Besides YUKOS (-10.4%), other losers this week were Mosenergo (-5.9%) and RAO UES (-5.5%). LUKoil and Norilsk Nickel performed well, gaining 1.6% and 2.4% respectively.

The Financier’s Date Book

August 16      Northwest Telecom releases its financial results for 2003 according to international standards
August 17      Tsentrtelecom places 7 billion rubles in bonds
August 18      St. Petersburg issues 5 billion rubles in bonds

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