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. Last Updated: 07/27/2016

T-Bill Market Yields End Down 6%




Despite a slight worsening in the treasury bill market Friday due to profit-taking, yields ended the week down 6.62 percent.


Encouraged by a stabilized ruble, foreign investors led the renewed interest in T-bills, which Thursday saw yields reach a recent low of 33.08 percent.


Short-term profit-taking Friday drove yields back up marginally and the market closed at 33.33 percent.


In comparison, the equities market was quiet. The Moscow Times Index of 50 leading shares inched downward 0.5 percent for the week. The index closed Friday at 228.32 on $37.78 million in trades on the Russian Trading System.


Russian dollar-denominated debt interest rates, however, fell Friday on concerns that the IMF may delay the next installment of its $10 billion loan.


The IMF has been pushing Russia to make progress in improving its tax collection system, restructuring monopolies, and introducing market reforms.


That uncertainty was compounded by an announcement from a major international credit agency, Fitch IBCA, that it planed to review the economic situation in Russia for a possible change of its BB+ long-term foreign currency rating.


The agency cited a lack of credibility in the government's attempts to resolve the budget crisis.


First Deputy Prime Minister Anatoly Chubais, in Voronezh on Friday, said there was no real threat of a downgrade, Interfax reported.


He said the government was ready to provide all the necessary information for checks and that the past three weeks had witnessed a stabilization of the financial situation in the country, Interfax said.


Indeed, one analyst called the drop in bond prices that resulted from the ratings agency announcement an "overreaction to the news."


"Everything is always blown out of proportion in this country," said Tad Berger of Creditanstalt-Grant. "Investors are starting now to take an objective look at what's going on and the market should level out."


Meanwhile, the low volumes of trade on the equities market suggested to analysts that investors were more interested in exposure to the market than serious investment.


Surgutneftgaz lead the market with an 11.94 percent increase, closing at $0.15 on Friday. News of Rostelecom's upcoming Level-2 American Depositary Receipt issue pushed the company's stock up 2.39 percent this week to $3.25.


UES dropped 1.03 percent to $.024, and LUKoil was down 1.53 percent to $18.08.