I'll buy into Russia as it drops. The market is cheap. The same
cannot be said about TRF, though, which is still traded at a big
premium to NAV. I prefer RNE. -Vi
MOSCOW, May 13 (AFP) - Russian blue chip stocks plunged sharply
Wednesday amid extremely negative sentiment brought on by steep
declines on Southeast Asian markets, traders said.
At 6:00 p.m. (1400 GMT) the leading Russian Trading System (RTS)
index was down some four percent on Tuesday's close at 279.19, as
jitters in Asian markets quickly infected the Russian market.
"There are all sorts of nasty rumours in the market on top of
the Indonesia unrest and rumours of a devaluation of the Hong Kong
dollar, and there haven't been any buyers," said Gary Kinsey, a
trader with the Brunswick brokerage.
"The problem is that no one is looking at fundamentals," Kinsey
said. "There have been a few buyers just throwing in the towel and
getting out of Russia. Sentiment is really awful."
Russian equities were pasted by last year's Asian financial
crisis, and Russian stocks have remained one of the poorest
performers in the world this year, despite the appointment of a new,
reform-oriented Russian government.
Traders on Wednesday pointed to Hong Kong, where shares closed
down 3.7 percent, and Indonesia, where simmering unrest continues to
plague regional markets, as the major influence on the Russian
market.
Tom Brackenbury, a trader with the Rinaco brokerage here, added
that local factors such as President Boris Yeltsin's signature into
law of a bill capping foreign ownership in UES at 25 percent were
also "bad for sentiment among the foreign investment community."
"The whole economic picture is under question again," he added.
Foreigners currently own about 30 percent of the electricity
monopoly, but Yeltsin was forced to sign the bill after parliament
overrode his veto.
Bonds were similarly hit after a day of heavy selling on
Tuesday, with yields at two auctions Wednesday inching up towards 40
percent for one-year bonds, and over 40 percent for a three-year
bond.
"Nobody is really keen to buy right now," said Maxim Safonov, a
bond trader with the Dutch ING Bank. "People are waiting for trend
reversals or a turnaround before moving back in, given the concerns
about Asia and some worries about Russia too."
He said the government sought to keep yields down at Wednesday's
auction by redeeming less than it raised.
The ruble meanwhile continued to lose ground against the dollar,
trading at as much as 6.16 against the greenback, against central
bank fixing of 6.143, traders said. |
