Investment in Russia and Eastern Europe Message Board

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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: baystock who wrote (309)	7/15/1998 8:10:00 PM
From: Real Man	Read Replies (1) of 1301

Let's watch the GKO market - the key of current crisis. For ruble devaluation - Drop of commodity prices; central bank intention (some time this spring in the news piece) to keep the ruble in line with inflation; the state will ease the short-term debt burden. Against it - The banks sold options to foreigners, so if ruble devalues 40%, estimates are 98% of commercial banks will be bankrupt; rising unrest (do they care? I somehow doubt it. The government opted to pay debt first, then salaries). Careful - options are mostly due in the summer, so we could see ruble devaluation in the Fall. On stock valuations - I believe, stocks are valued below US stocks at the peak of the Great Depression (1932). Of course, there are additional risks in Russian stocks. -Vi

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