Russia 01 (May 08 - Jul 10)

[LenaHuat]

None of the Western leaders can beat Putin's theatrics :

Putin Saves TV Crew From Escaped Tiger

http://www.spiegel.de/international/zeitgeist/0,1518,575548,00.html

[millionairemind]

Just like when Hillary Clinton said she had to dodge sniper fire???

[kennynah]

talk about hillary clinton...did u guys know that this lady made a ton of money trading commodities in her earlier working life? there were controversies surrounding the over leveraging that was extended to her, bcos of her political connections... anyways..bottom line, she made it big time on her trades in a short time.. goog for the details...

[winston]

Deal ends feud over BP's Russia venture

British and Russian shareholders have announced an end to a months-long feud for control of joint oil venture TNK-BP, in a move hailed by the Kremlin as a positive signal to foreign investors.

The agreement, which envisages the departure of British chief executive Robert Dudley but no shift in the balance of ownership, is ''a sensible means of resolving a situation that could not continue without causing serious damage'' to TNK-BP, BP chief executive Tony Hayward said in a statement.

In a separate statement, Mikhail Fridman, representing the group of Russian billionaires that owns 50 percent of the company, said the agreement ''opens fundamentally new opportunities for the development of TNK-BP.''

AGENCE FRANCE-PRESSE

[LenaHuat]

talk about hillary clinton...did u guys know that this lady made a ton of money trading commodities in her earlier working life? there were controversies surrounding the over leveraging that was extended to her, bcos of her political connections... anyways..bottom line, she made it big time on her trades in a short time.. goog for the details...

K, she made more $$ writing her memoirs. Then, so many Americans were willing and dying to hear what she had to say abt Monica Lewinski (y?) in her book Not in my lifetime will I forget what had happened in the WC at the Oval Office.

[millionairemind]

Moscow forced to shore up rouble
By Charles Clover in Moscow and Peter Garnham in London

Published: September 4 2008 20:37 | Last updated: September 4 2008 20:37

Russia’s central bank intervened heavily to support the rouble on Thursday as analysts said $21bn of foreign capital might have been pulled out of the country as Moscow paid the price for its conflict with Georgia.

The rouble fell as low as R30.41, its weakest level since the Russian central bank adopted its euro/dollar basket in February 2007. The central bank governor admitted there had been capital outflows since the war but said the amount was much lower.

The currency intervention was the first since the height of the war with Georgia at the beginning of August. Before the conflict the central bank’s interventions in the market were aimed at stemming the rise of the rouble, which it manages to a basket weighted 55 per cent in dollars and 45 per cent in euros.

The attractions of resource-rich Russia, a net foreign creditor with sustainable trade and fiscal surpluses and the third-largest foreign exchange reserves, had made the rouble a one-way upward bet. However, the rouble has suffered as foreign investors have pulled money out of Russia.

The outflow of capital from Russia has slowed markedly from its pace in the middle of August, when capital flight was $21bn in the two weeks to the end of August 22, according to Goldman Sachs, the investment bank, and foreign currency reserves fell at their most precipitous rate since the 1998 currency crisis. Capital outflows in the week ending August 29 were a much lower $1.7bn, though over the past two days the value of the rouble against the dollar and euro sank 2 per cent indicating renewed capital flight. To stop the rouble falling further, the central bank sold $3.5bn-$4bn in reserves, currency dealers were reporting.

Dealers at MDM Bank in Moscow believe the central bank sold up to $4.5bn in an effort to halt the rouble’s fall, said Mikhail Galkin an MDM analyst.

The rouble sell off is a sign that in spite of the stabilisation of the conflict in Georgia, and the absence of tough sanctions on Russia, investors still perceive political risk. Russia’s Rts stock market index fell 3.94 per cent after dropping 4.25 per cent on Wednesday.

The central bank said that the capital outflow from Russia last month, when unnerved investors headed for the exits, was $5bn. “According to very preliminary estimates, the outflow [in August] totalled around $5bn,” said Russian news agencies quoting Sergei Ignatyev, central bank chairman.

Ivan Tchakarov, a vice-president of emerging markets research at Lehman Brothers, said: “We find CBR claim that only $5bn has left Russia in August highly unlikely ... In our view, August capital outflows may amount to at least $15bn-$20bn.”

Russia’s central bank still has an impressive war chest to defend its currency. Its reserves measured in this week at $582bn, the third-largest foreign currency reserves in the world.
Copyright The Financial Times Limited 2008

[kennynah]

Unsure if 21billion is significant amount to Russia? Supposeing this is not funded by printing, then the drop in rubble will only be explained by political factor. This perhaps is not to be considered a war, considering Russia is so much mightier in in military migh. just TOL

[millionairemind]

Russian Stocks, Bonds Tumble as Central Bank Props Up Ruble
By Denis Maternovsky and Abigail Moses

Sept. 5 (Bloomberg) -- Russian stocks plunged and the cost to protect government bonds jumped to the highest in almost four years as the central bank shored up its currency pummeled by the conflict in Georgia and tumbling commodity prices.

The central bank said it intervened in the currency market after the ruble fell to the lowest level in almost a year against the dollar yesterday. Russia's RTS Index fell the most among 88 stock indexes tracked by Bloomberg today, capping its worst week since May 2006, and credit-default swaps on the government's debt rose 12 basis points to 164, the highest since November 2004, according to CMA Datavision prices.

Russia investors pulled out $4.6 billion since the invasion of Georgia last month, according to the central bank. Russia, the world's biggest energy exporter and the largest producer of nickel and palladium, was also hurt as a 7 percent drop in crude oil this week to the lowest since April cut investor demand for commodities.

``They have to intervene because people are selling ruble assets and taking the money out of the country,'' said Nigel Rendell, senior emerging-markets strategist at Royal Bank of Canada Ltd. in London. ``In a time of uncertainty, I think it's a sensible move to get out of Russia. The political situation doesn't look good.''

The five-day war with Georgia brought Russia into conflict with one of the region's staunchest U.S. allies. Georgia is the third-largest member of the allied coalition in Iraq and a link in a U.S.-backed ``southern energy corridor'' that connects the Caspian Sea region with world markets, bypassing Russia.

Trading Band

The central bank in Moscow sold a ``significant'' amount of foreign currency yesterday to prop up the ruble, First Deputy Chairman Alexei Ulyukayev said. ``The ruble had got to the higher end of the trading band, so it was reasonable,'' he told reporters in Sochi today, declining to give the exact amount.

The bank sold about $4.5 billion of foreign reserves yesterday, according to Mikhail Galkin, a fixed-income analyst at MDM Bank in Moscow.

The dollar-denominated RTS stock index retreated 4.9 percent to 1,451.24, bringing its weekly decline to 12 percent. The ruble-denominated Micex Index sank 5.5 percent to 1,211.02, the lowest since June 2006.

The ruble fell to as low as 25.4602 per dollar yesterday, the weakest level since Sept. 12.

[winston]

Resource stocks hit Russian equities
By Rachel Morarjee and Peter Garnham

Published: September 5 2008 14:42 | Last updated: September 5 2008 14:42

Russia’s stock market fell sharply on Friday to its lowest in over two years as investors sold resource stocks in response to escalating fears for global growth and the sliding price of oil.

“The market has decided that global growth is rolling over and that means all cyclicals get hit from emerging markets to commodities. The hope that Chinese industrialisation would sustain growth has faded,” said Kingsmill Bond, chief strategist at Russian investment bank Troika Dialogue.

The weakening in the oil price in recent days is the latest blow for Russian equities that have been hammered by the war between Russia and Georgia and gnawing concerns about political interference in Russian corporate governance.

Metals stocks led the declines, with Norilsk Nickel falling 9.6 per cent to 3834.09 roubles -- posting its biggest intraday drop since it was listed on the Micex exchange. Steel maker Magnitogorsk dived 8.9 per cent to 20.51 roubles

“The global move away from equities generally, as the US economy weakens and demand slows, has hurt Russia, as a commodity exporter,” said Tom Mundy, Moscow-based equities strategist at Renaissance Capital.

The rouble-denominated Micex index fell as much a 9 per cent before closing 3.7 per cent down to 1,234.71. Meanwhile, the dollar-denominated RTS index fell 3.8 per cent to 1,469.15. The RTS index is down almost 40 per cent this year and posted a weekly drop of 11 per cent.

A perception of an increase in political risk as a result of the tensions in the Caucasus has also weighed on the stock market, said Mr Mundy.

The Russian central bank has been forced to intervene heavily to support the rouble, as jittery investors have withdrawn their money. Banks stocks declined on investor concern that the rouble’s plight will accelerate inflation, slowing down Russia’s economic growth. State-owned VTB bank sank 7.9 per cent to 0.51 kopeks, a record low.

However, on Friday the rouble strengthened against its euro/dollar basket after Alexei Ulyukayev, first deputy chairman of the Central Bank of Russia, said the bank was not planning to widen the corridor in which the Russian currency trades.

The central bank manages the rouble against a basket of 55 per cent dollars and 45 per cent euros.

Although not officially confirmed, the central bank was widely believed to have sold up to $4.5bn to support the rouble on Thursday after it hit a low of 30.41 against the basket.

The rouble edged higher on Friday after Mr Ulukayev’s comments to stand at 30.32.

[winston]

Not vested in Russia yet. From Brian Hunt:-

=============================

THE WORST DOWNTREND IN THE WORLD RIGHT NOW

The downtrend in Russia is getting downright ugly.

As we've mentioned in the past few months, the Russian stock market is one of the world's great "boom and bust" markets. The country holds incredible amounts of oil, natural gas, timber, precious metals, and base metals... so its economy is sensitive to commodity prices. Russia is also home to incredible amounts of government and corporate corruption.

These two drivers are clobbering Russian shares right now. Oil has fallen $40 a barrel in the past two months. Natural gas has fallen 44% in the same time. Gold, silver, nickel, platinum, and palladium are all declining. The invasion of Georgia makes the country look like a gang of thugs.

Today's chart is a picture of this clobbering. It's the past year in the Templeton Russia Fund (TRF). This basket of Russian stocks is down 40% since June. If there is a bigger decline in the ETF world right now, we haven't seen it.