Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Equities Hit Highs for the Year

After a short pause to catch their breath at the start of the week, equities rallied to year highs with a gain of 18.4 percent from last week.

The Moscow Times Index was up 14.9 percent to 175.64 for the week.

The RTS index surged to 224.82, up 37 percent from a year low at 164.32, which it hit just two weeks ago on Feb. 28.

Weekly trading volume amounted to $1.21 billion on all exchanges, according to estimates made by Troika Dialog brokerage. This figure includes trading in RTS, MICEX and three major offshore exchanges - New York, London and Frankfurt - and is "a world away" from the $43.3 million RTS volumes of the same week last year.

Traders are bullish about the prospects of Russian stocks.

"We anticipate a short correction, but there is room for growth left," said Roman Dmitriyev, a trader with Russian Funds investment group.

Expectations of a major turnaround in the nation's economic fortunes after the March 26 presidential elections were the major driving force behind last week's gains.

Other drivers were strong fiscal performance, growth in oil prices and an emerging-markets rally in the wake of Mexico's upgrade by Moody's Investors Services.

Together, LUKoil and national power grid Unified Energy Systems made up for 59 percent of trading volume, with UES being one of the top winners of the week. UES' stock moved up 27 percent to 19.5 cents a share.

Rostelecom surfed to $3.90 with a gain of 31 percent, taking the top spot among the blue chips.

Some preferred shares outperformed ordinaries, narrowing the gap, a usual development on the eve of annual shareholder meetings held in spring.

UES's preferreds were up 30 percent to $0.0835, and those of Rostelecom surged 40 percent to $1.34.

Traders are closely watching second-tier telecommunication companies, first candidates to become growth stocks after a rally in the first tier.

Kubanelektrosvyaz and Chelyabinsksvyazinform are the two stocks that most traders name when referring to the second tier.

"There is also some potential in preferreds of Surgutneftegaz," Dmitriyev said.