September 10 - Norilsk Nickel announced its results of the first quarter of 2004 according to international standards and demonstrated a 40% increase in earnings.

September 13     - The government began its investigation of whether Yuganskneftegaz kept to the terms of its license agreement. As a result of the investigation, the company’s oil production license could be revoked.

September 14    - President Putin supported the government’s proposal to merge Gazprom and Rosneft. Gazprom shares gained 15%.
                           - Severstal announced its results for 2003 according to international standards and demonstrated growth in earnings and profits.

September 15   - TNK-BP stated its interest in acquiring YUKOS stock.
                          - Minister of Industry and Energy Viktor Khristenko announced that the market for Gazprom stock may not be completely liberalized.
                          - Sun Interbrew published results for the second quarter of 2004, demonstrating a 160% increase in net profits.

September 16   - German Gref announced that the government will support the full liberalization of the market for Gazprom stock.

Last week, the currency market was under the ever watchful eye of the Central Bank, which fended off all attacks on the dollar. By buying dollars for 29.215 rubles, Russia’s main bank kept quotes in the narrow range of 29.21-29.22 rubles to the dollar. On Tuesday, September 14th, the Central Bank was forced to buy $1.8 billion from currency dealers, the largest amount in almost the last six months. The currency bears came out not only due to the large amounts of export earnings, but also in anticipation that the Central Bank will soon change its exchange rate policy and concentrate on fighting inflation.
Trading on the federal ruble bond market was light for most of the week. Trade volumes ranged from $96-364 million and prices moved in various directions. The week’s big event was the Wednesday auctions to place two OFZ issues totaling 10 billion rubles. The first auction went well, placing almost the entire planned issue of 4.8 billion rubles with a premium to the secondary market of 10-15 basis points. At the second auction, only 20% of the announced 5.2 billion ruble issue found buyers.
Heavy trading and rising prices came to the corporate and municipal bond market. The market was helped considerably by factors on the currency market, namely a sharp increase in the amount of currency sold as investors closed their longs and an increased influx of export earnings due to rising oil prices. This led to greater ruble liquidity that gradually seeped into the bond market. Corporate bonds of all tiers made more than 25% p.a. for the week. The disinterest in top-tier bonds common in recent months came to an abrupt end with a sharp increase in Gazprom bonds, following announcements that the company might be taken over by Rosneft. Nonetheless, telecom and metals saw the greatest growth.
The market for Russia’s foreign debt also continued to look bright. In the first half of the week, the positive performance of US Treasuries and rising prices on the majority of emerging markets supported Russian eurobonds. Starting on Wednesday, this positive atmosphere was further promoted by news of the liberalization of Gazprom stock. For the week, the yield on Russia-30s fell by 5 basis points.
Early last week, the stock market saw minor growth. Trading was light and second-tier stocks led the way up. However, the situation changed fundamentally on Tuesday when news came regarding Gazprom. Trading on the RTS more than tripled to $17 million. The natural gas monopoly’s stock pulled up the rest of the market with it. For the week, the RTS reached the highest point in nearly three months, closing at 615.5. The leader of this growth, Gazprom, gained 18%. Tatneft (+6.6%) and Sberbank (+5.3%) also did well. YUKOS was left out in the cold as its stock lost another 8.4%.

The Financier’s Date Book

September 20     Northwestern Telecom extraordinary shareholders’ meeting
September 21     The US Federal Reserve’s FOMC meets
                            Irkut releases its annual report for 2003 according to international accounting standards