Russian stock up after long slump

Russian stock came up after a slump that lasted longer than a month. The rise came with beneficial developments abroad-high petroleum prices, US stock indices up, a correction rise of the Russian ADR in London, and a returning Eurobond demand, to say nothing of many emitters closing registers before stockholders' meetings to prompt buyers.

The Russian Trading System index came 2.24% up by closing time yesterday to 589.57. The classical stock market day brought 243 deals to a total US$24.038.

Experts, however, remain sceptical. They don't think that, after the big slump, the market will hardly get back on its own, what with no formidable reason for bids U-turning.

"Market prospects are vague," says Sergei Kosynkin, Zerich Capital Management Co. staff analyst. The Russian stock market is repeating global trends-up with no lasting hopes for the bulls. The index will move up for some time after stock oversales, but further progress is doubtful unless more reasons for a rise turn up, he expects.

The RTS auction closed with a rise on all liquid stock in a range of +0.45%, Yukos, to +8.99%, Savings Bank of Russia. The Norilsk Nickel is 6.88% up, the United Russian Power Grid 5.52%, the others within 4%.

As the RTS finished its deals, the Moscow Interbank Currency Exchange saw no major shifts with the blue chips. Its index was 3.32% up to 540.72 by 18.45, Moscow time. The most liquid stock came up, too-for instance, 1.77% for the United Russian Power Grid, or 8.37%, the Savings Bank of Russia.

The Savings Bank is breathtakingly up, points out Olga Belenkaya of Olma Co. Hopefully, the Morgan Stanley Capital Intl. intends to enter its stock on the MSCI Global stock index after the May 28 auction finishes. That will send overseas Savings Bank bids skyrocketing, forecasts the expert.

The Cabinet will certainly not make a resolution on the selling principles of wholesale generating companies before May 21, announced Prime Minister Mikhail Fradkov. The market promptly responded with a slump. The united Russian Power Grid stock plummeted to have a narrow escape as it closed the register today before an annual holders' meeting-that after a bad slump of the entire preceding month.

Norilsk Nickel prices came low down to encourage bidders-largely thanks to a correction of world metal prices after a long slide down, points out Maxim Shein, BrokerCreditService analytical board head.

Even if the market moves higher up in the nearest future, that will be largely a speculative movement, expect analysts.

Bulls usually profit with similar situations, so the nearest auctions may be very impressive, forecasts Pavel Metzger, Amity Co. expert. The situation outside Russia is getting a bit more hopeful, and is likely to encourage bidders. If no aggressive offers come up within the next two or three weeks, the market is likely to settle down at its current level. Developments will closely depend on the global stock situation, and domestic corporate and political news.

As for Olga Belenkaya, she thinks this week might bring the stock market slightly back to stability if not for small rouble liquidity and negligible overseas bids.