I wonder what this does to negotiations with Exxon etc and Russian companies... any future impact on oil prices?
Russian stocks slump after magnate's arrest
Mon 27 October, 2003 08:24 BST
RELATED ARTICLES
Khodorkovsky arrest could mean surrender of YUKOS
YUKOS-from Soviet bank to global Big Oil
MOSCOW (Reuters) - Russian stocks have suffered a 10 percent drop, driven down by a slide in shares of oil giant YUKOS following the arrest of the firm's head over the weekend.
The Russian rouble also dived in early Monday trade as banks rushed for the U.S. currency amid fears the arrest of Mikhail Khodorkovsky, YUKOS's chief executive and Russia's richest man, may lead to capital flight.
One of Russia's leading stock exchanges, MICEX, was down 12.6 percent at 0800 GMT, while YUKOS was down almost 19 percent on MICEX and 16 percent on the RTS bourse.
By 0730 GMT, the Russian currency had eased about half a percent to 30.0750 per dollar from 29.9156 on Friday as banks rushed to close their short dollar positions, dealers said.
"After authorities put Khodorkovsky in jail, people started to assume that the outflow of private capital would considerably exceed capital inflow and that caused some panic on the market," said Artem Roshchin at Aljba Alliance bank.
"People have started closing all short dollar positions, switching to hard currency rapidly."
Khodorkovsky was snatched from a plane in Siberia on Saturday, whisked to Moscow, charged with fraud and tax evasion and ordered held pending further investigation.
Liberals, including some backed by Khodorkovsky against President Vladimir Putin's allies in December's parliamentary elections, denounced the YUKOS head's arrest. Some said only an assurance from Putin on the future of Russian business would calm investors.
Paul Collison from Brunswick UBS said he believed bears would dominate the Russian market at least until the year-end, after months of gains due to high oil prices and credit rating agency Moody's Investors Service's upgrade of the country to investment grade.
"I'm going on a two-week road-show and I'll tell investors that volatility will increase at least until December. But if there are really big sell-offs, I'll tell them that it is time to buy," he said.
Fund manager Ivan Mazalov at Prosperity Capital Management, which manages $500 million worth of Russian assets, said a deep correction would allow strategic investors, who still believed in the Russian market, to buy more shares at cheaper prices.
"It is a pity that the market will go down. But on the other hand it will allow long-term investors to open new positions after speculative volumes of recent months are cut down," he said. |
