|
Russian Stock Markets Tumble on War Fears
Here's something Comrade Stalin never had to worry about.Worries over Russia's involvement in the escalating conflict in South Ossetia sent Moscow stock markets tumbling Friday. The benchmark RTS Index dropped 6.5 percent to 1723.32 points, while the ruble-denominated MICEX fell 4.9 percent to 1,365.26 points, as of 5:20 p.m. The worst-hit Russian stock was Inter RAO, a power generator with plants in Georgia, which lost one-quarter of its value in Moscow trading Friday after Georgia said Russian warplanes bombed two Georgian towns. "Yo, Vlad! Boris here. Listen, dude, I'm all in favor of offering fraternal assistance as requested by the peace-loving people of South Ossetia, wherever the hell that is, but my 401(k) just tanked big-time." For weeks, Russian stock indexes have been hit by a double whammy of global factors such as sliding oil prices and the continuing global credit crunch, and domestic factors such as investors' fears over the TNK-BP shareholder dispute and an anti-monopoly crackdown aimed at coal and steel firm Mechel. Analysts said the possibility of a war with Georgia was the last thing Russian stocks needed, amid other troubles. "Comrade Putin, shall we shoot the analysts?" "There has been a large-scale outflow of capital which seriously weakened the ruble, forcing the Central Bank of Russia to lend 127 billion rubles to banks on Friday," said Anton Strouchenevsky, chief economist at Troika Dialog. "War-related political risk always scares investors away from the domestic markets more than any business-associated risk." Comrade Anton is clearly a running dog capitalist lackey. Prolonged involvement in the South Ossetian conflict could put Russian assets at risk and could put downward pressure on the ruble, analysts said. "We particularly expect a decline in the ruble and widening of [credit default swap] spreads, which is likely to apply pressure to Russian stocks and bonds," said Alexei Moisseyev, head of fixed income research and economics at Renaissance Capital. "Comrade Putin, shall we shoot the credit default swap spreads? What do they look like?" "However, we think that, with fundamentals remaining solid, any sell-off is likely to be reversed in a matter of days and weeks, with the timing dependent on the scale of Russian involvement." Posted by: Matt 2008-08-09 |
| http://www.rantburg.com/poparticle.php?ID=246583 |