RTS Throws a Birthday Party

As markets dripped red on Monday night, bankers and investors toasted in the RTS Index's 14th year at a chic bar located on the bank of the Moscow River.

The two industries that fare well during recessions are alcohol and movies, said Stuart Lawson, HSBC's chief executive in Moscow — a statement well reflected among the guests, who mingled with singing performers dressed as Marilyn Monroe, Charlie Chaplin, Liza Minnelli and Edith Piaf at the Hollywood-themed party.

Most partygoers seemed in jovial spirits as they headed for return trips to the open bar, even though just two hours earlier the RTS had closed at 1,395.11, a 39 percent drop this quarter.

"Now most likely the nice, pleasant period is going to begin," Konstantin Kolpakov, a general producer for RosBusinessConsulting, suggested soon into the evening.

"Things are changing. By the end of September, everything will be fine," he said, turning to his neighbors to toast their shot glasses of Russky Standart.

Other guests, such as Oleg Kharitonov, chairman of the management board at Russian Development Bank, had a more cynical take.

"My friends told me I should come tonight just to laugh at all the unlucky people," Kharitonov said, before proceeding to tell a joke about Gazprom, which, like some other stocks, has been hit hard by investor jitters.

Smoking out on the balcony, Bank Sistema vice president Vladislav Kornev voiced skepticism about the market's future but said the financial turmoil of the late 1990s gave him perspective: "If today is bad, it doesn't necessarily mean tomorrow will be bad too," he said.

An hour into the evening, RTS president Roman Goryunov stood up to address the party's guests. Within his first minutes on stage, Goryunov acknowledged the sinking market by joking that one of the day's pieces of good news was that RTS had dropped to 1,395.11. Turning serious, he said he had two pieces of good news: the RTS would begin its 14th year on Wednesday and, while the index had been underperforming, it had seen worse.

"People should understand that the market doesn't always rise and doesn't always fall," Goryunov said.

Speaking after Goryunov, Anatoly Aksakov, a member of the State Duma's Financial Markets Committee, continued on a similar line. "The index is located at a point where people should buy, and smart people will," he said.

Guests acknowledged the irony of the party's timing but most decided it was in everyone's best interest to enjoy the night.

"Markets don't go by anniversary dates," deadpanned Alexander Matturri, an executive managing director for Standard & Poor's, who had flown in from New York.

Alexander Cheremnykh, a manager at RTS, said the lavish event was exactly what the market needed. "These parties are good for market morale," Cheremnykh said.

Surveying the crowd of men dressed in suits and holding champagne glasses, the actress who played the part of Marilyn Monroe for the evening offered an upbeat assessment of her own, saying the economy had risen significantly since the mid-1990s, when her father, a factory worker, could barely afford to put food on the table.

The actress, Marina Kumarina, said she hoped that the growth would continue. "We want prestige. We want to take pride in our country," she said. After a pause, she added, "Frankly speaking, we're sick of not feeling like the best."