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To: Madharry who wrote (8330)	9/20/1998 2:23:00 PM
From: Steve Fancy	Respond to of 22640

Armin, one interesting twist is that shortly there won't be anything to easily compare against with the split. This theory should extend to the actual Bovespa index too. Maybe not a huge factor, but something to keep an eye on anyway. Also, with any luck, only one of the 12 new co's will be in the index at all. sf

To: Madharry who wrote (8330)	9/20/1998 2:24:00 PM
From: Steve Fancy	Respond to of 22640

Primakov Assures Industry Leaders Russia Is Working on Recovery Plan Dow Jones Newswires MOSCOW -- Prime Minister Yevgeny Primakov met with leading industrialists and bankers Sunday and assured them that his government is trying to pull the country out of its economic crisis. The new prime minister said that even though he hasn't yet named his whole cabinet, the government has been working on a recovery plan for the past six days. "Active work on this program is under way," he told the leaders of the Russian Union of Industrialists and Entrepreneurs. Mr. Primakov told the industrialists that reforms won't succeed without their support. "The plan will be incomplete without proposals from industrialists and employers," he said. One of the priorities Mr. Primakov has set for his government is reviving the commercial banks' activities. The banks have been brought to the brink of bankruptcy, and their virtual shutdown for the past two weeks has brought other commercial activities to a standstill. A central bank official said Saturday that a program set in motion Friday to help the banks pay off their debts has been successful. Andrei Kozlov, first deputy chairman of the central bank, said the program has gone particularly well in St. Petersburg, Samara and Yekaterinburg -- though the vast majority of banks are concentrated in Moscow. The central bank is helping banks clear their debts to one another by a so-called debt-swap system -- allowing them to use reserves stored in the central bank to pay their liabilities. The central bank has also promised to buy government bonds held by the commercial banks at prices much higher than their actual market value. The move is intended to prime the banks' pumps so they can begin paying debts and getting money back into the economy. The good news the government put out about the banking system Saturday came on the heels of official word that Russia's economic decline is worsening. The Interfax news agency reported Friday that the gross domestic product fell 8.2% year-on-year in August. Interfax said the drop was the sharpest since 1994. In August, the nearly insolvent government defaulted on its domestic Treasury debt and devalued the ruble. After that, the nation's financial markets collapsed. Mr. Primakov, who was confirmed by parliament on Sept. 11, said Sunday that his government was working on reforms "that instead of harming people, would make them better off." The prime minister has also sought to assure foreign investors that the Russian government will meet its obligations. At the same time, he has urged Western lenders to fulfill their promises of aid to Russia. The International Monetary Fund, which put together a $22.6 billion aid package to Russia this summer, has said the next tranche of aid will be postponed until the government resumes market reforms. Mr. Primakov's new government is depending on delivery of the second $4.3 billion tranche of the IMF loan to give it breathing room for implementing anticrisis measures, Deputy Prime Minister Alexander Shokhin said last week. Although the new government's economic program is still being worked out, it will include the imposition of some Soviet-style controls over the economy, according to officials' statements so far. Part of the plan is expected to involve the printing of billions of new rubles, which will almost certainly fuel inflation. Consumer prices have already begun to soar after being kept under control for more than a year. Inflation fears caused financial markets to weaken further on Friday. Both the ruble and Russian stocks continued to lose ground. In over-the-counter trading on the Moscow Interbank Currency Exchange, the ruble ended at 18 to 19 to the dollar, compared with 14.6 to 14.7 to the dollar late Thursday. On the Moscow stock exchange, the Russian Trading System index fell 4.2% after plunging 10.9% Thursday. The Communist Party, the dominant voice in the opposition-dominated parliament, has so far acquiesced in the government's economic program. One of its members, new Deputy Prime Minister Yuri Maslyukov, is taking part in the program's formulation. Yet the party at its annual plenum on Saturday called for a new "government of national interests." Gennady Zyuganov, leader of the Communist Party, said his supporters would demand that the new government support Russian industry and set an official minimum standard of living.