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. Last Updated: 07/27/2016

All's QuietOn Market After Rally

Russian stock market took a breather this week after last week's furious rally, with local investors supporting quiet trading, and analysts say the trend will continue next week.


The Moscow Times dollar-adjusted index of 50 leading shares fell to 420.63 on Thursday and then recovered to 425.98 on Friday, down only 0.35 percent for the week. Twenty-seven issues posted gains for the week, 23 stocks declined and one was unchanged.


"This week was quiet. The market took a correction and then came back up," said Rinaco Plus trader Valery Levit. "Russian money alone supported the market. I don't see any foreign demand."


Traders said market trends are becoming hard to predict because Russian investor behavior is not easy to estimate.


"Russian banks are acting very aggressively. If significant resources come from the treasury-bill market, the growth could be endless," said Samit Yakovlev, head trader at United City Bank.


Rostelekom was the most actively traded blue-chip this week as the company announced that shareholders had voted for a new charter doubling share capital and doing away with a 5 percent cap on single-investor shareholdings.


"Everyone knew long ago that the charter would pass and sold their shares in order to buy them back cheaper on the bad news," Yakovlev said.


Rostelekom fell to $4.76 on Wednesday, the day before the voting results were announced and closed at $4.81 on Friday, down 4.8 percent for the week.


Mosenergo stock prices rose a bit this week on news Friday that it had posted a 20 percent increase in profits. But traders said there was not strong demand. "The news only gave people a reason not to sell," Levit said. "The reaction would have been different if the market was bullish."


Mosenergo shares closed Friday at $1.73, up 1.8 percent on the week.


In the fixed income market, the average weighted yield went up to 18.92 percent Friday from 18.33 percent last week because of a deficit of rubles in the market, said Alexander Yermak, an analyst at Skate financial information service.