Kommersant, April 22, 2002

Last week was one of the most successful for the Russian stock market as shares rocketed 5 to 20 percent in one week. The trading volume of domestic exchanges reached $1.4bn against $700m at the London Exchange. This spike was caused by a run-up in demand for Russian stocks by domestic and foreign market participants. The market sees positive news about Russian companies in particular and the Russian economy at large almost every day. On Monday the Moody's agency changed the outlook for Russian financial instruments nominated in foreign currency to 'positive', triggering rumors about the subsequent raising of the rating. On Tuesday the British oil corporation British Petroleum announced the purchasing of a 15-percent stake in Sidanco for $375m. The following day was marked by Shell's unveiling of intensions to invest about $8bn in the Russian economy. On Thursday Russian President Vladimir Putin uplifted the spirits of investors. In his annual address to the Federal Assembly, he declared that the GDP growth would reach 3.5 to 4.6 percent by the end of 2002. Russian companies are building up their activities on foreign capital markets. For example, the Svyazinvest and Norilsk Nickel holdings conducted road shows for investors abroad. Last week Gazprom and Vimpelcom floated their Eurobonds worth $750m. Oil securities issued by LUKoil, Yukos, Sibneft and Tatneft led the list of top sellers. The current oil price boom will bring huge profits to these companies. Telecom companies did not feel abandoned by investors either. Following a long period of oblivion, Rostelecom shares began going up. According to Denis Rodionov, Brunswick UBS Warburg co-director, Russian securities regained their popularity on the market and investors are hurrying to invest their money disregarding the size of companies and their indicators. A bright example of it is RosBusinessConsulting's initial public offering (IPO), the first in the history of the Russian stock market. Despite a lot of critical comments on the analytical forecasts of the underwriters, the company got five times oversubscribed. Dmitry Kulyashents, the chief trader at Renaissance Capital, believes that last week's rally will end with a corrective dip in the next few days. However investors' sentiment is expected to remain positive in the long-term perspective.