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. Last Updated: 07/27/2016

Shares Soar As Yeltsin's Stock Rises

Russian shares soared Thursday as investors gambled on victory by President Boris Yeltsin and speculated that the death of his Chechen arch-enemy could hasten the end of the war.


The Moscow Times Index of 50 leading shares jumped 5 percent for the second day in a row, closing at 170.59 in ruble terms and 76.23 in dollar prices.


Stocks have enjoyed a month-long rally since the MT Index hit its all-time low of 54.33 on March 19.


Analysts said soaring prices for leading shares could spark profit-taking before the June 16 presidential poll, but prices could double by August if Yeltsin wins a second term.


"Western investors in the market right now truly believe that Yeltsin will win the presidential election," said Dan Rapoport, director of sales at CentreInvest Securities.


He said Yeltsin had been helped by last weekend's nuclear safety summit.


On Tuesday, a Moscow Times/CNN poll put the incumbent ahead of Communist Party leader Gennady Zyuganov for the first time, although other polls say the Communist is still ahead.


"Investors are looking for signs that Yeltsin will be re-elected and that stability will continue. They are no longer trying to put a positive spin on a Zyuganov presidency," said Dirk Damrau, head of research at Renaissance Capital.


Investors also said the death of separatist Chechen leader Dzhokhar Dudayev was good news for Yeltsin.


"It makes Yeltsin look like the champion," Rapoport said. "A lot of Western investors are reacting very favorably to this," he added.


Some Russian shares hit all-time highs Wednesday and Thursday. Unified Energy System, a key utility, rose almost 50 percent to $0.055/063 by midday, after closing Wednesday at $0.039/040, although it later eased back.


Mosenergo, a utility seen as a benchmark, was up two cents at 40 cents. Five weeks ago it stood at around 18 cents.