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. Last Updated: 07/27/2016

Thin Trading Pushes Rare Market Increase

Stock prices ticked up Friday, helping the market post a rare weekly rise after nearly a month of selling following President Boris Yeltsin's July 3 re-election.


The Moscow Times Index closed Friday at 273.89, up 10.67 for the day and 9.82 percent for the week. The dollar-adjusted index gained 4.26 on Friday, to 115.89, up 9.21 percent for the week.


"There weren't many sellers around, and finding stock was quite difficult," said one trader with Renaissance Capital. "Things are looking a bit up, since everyone who wanted to sell has already done so. We're not going to go much lower."


Still, thin trading volumes exaggerated any gains, market makers added. "The volumes were a little bit better on bids by small local brokers," another trader said. "But the lack of liquidity plays a large role in that."


Moreover, the market appears to be standing still until the Yeltsin administration presents its cabinet choices and gets down to work pushing for pro-reform business legislation in the parliament in the fall. Western investors will also be scrutinizing Russia's economy for healthy GDP growth, signs of inflation and a crisis in the banking sector.


With fundamentals in the Russian market little changed since Yeltsin's victory, "the real contest will be where the market is in the fall, after the inauguration and cabinet appointments. Everyone is waiting on that," said Berend Yntema, director at Sector Capital. "Whatever is happening right now is not really substantial, since the market can go a little up or down depending on mood of one fund manager. People are waiting for the serious money to come in the fall."


Among the biggest decliners Friday, Avtovaz lost 15.78 percent, to close at $1.60. Red October slid 13.05 percent, to $10 a share. Among gainers, Tatneft ran up 44 percent, to $21 a share, and Onako Oil Co. climbed 29.81, percent to $2.70.


In company news, the board of directors of Yukos, Russia's second largest oil producer, called an extraordinary shareholders meeting for Sept. 14 to get approval for a new rights issue amounting to 30 percent to 35 percent of existing capital, Reuters reported. Shares could be priced at $40 to $45 each.


Energy giant Gazprom and German consortium Ruhrgas/Preussenelektra have been awarded the winning bids to acquire 16.25 percent of the shares each in state-run Latvia Gas Company, the tender for which closed July 25. Separately, a stake of 10 million shares in Gazprom was sold at auction at average of 2,082.2 rubles each Friday, up from 1,673.66 rubles last week. The stake represented about 0.042 percent of Gazprom stock. The next auction is Aug. 9, when 11.25 million shares would be sold, starting at 1,978 rubles a share.


The ruble eased 18 points Friday to 5,229 per dollar, although bidding was helped somewhat by Central Bank intervention and ruble purchases by banks before government paper auctions next Wednesday. Today rubles fell to 5,230-32 from 5,224-26 Thursday. Tomorrow rubles eased to 5,232-33 from 5,255-26 Thursday.