20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 USD-2030 USD-2007 USD-01.09.05.09.07.09.08.09.12.09.14.09.16.09.20.09.22.09.26.09.28.09.30.09.04.10.06.10.220.127.116.11.18.104.22.168.22.214.171.124.126.96.36.199.02.11.07.11.09.11.14.11.188.8.131.52.184.108.40.206.The government rouble-denominated debt market early in the month demonstrated a slight growth in the rates of bonds against the background of average trading activity. This resulted from a somewhat improved situation concerning liquidity; however, this factor was in part neutralized by the strengthening rate of the USD in respect to the rouble. The response of the market participants to the increased interest rate in the USA was rather moderate, because this factor had already been incorporated in the prices. Later on followed a worsening situation on the market, coupled with lowering trading activity. The main problem was associated with money liquidity. In the situation of a dramatically growing exchange rate of the USD, the main bulk of the available resources was naturally being directed toward transactions in foreign currencies. Nearer the month’s end, no active sales were noted on the market, and the prices of securities were demonstrating only negligible changes. The market was supported to a certain degree by the favorably changing quotations on the currency bonds market, as well as the stabilized exchange rate of the USD as regards the rouble.
In the period from 1 through 25 November, the aggregate turnover on the GKO-OFZ secondary market amounted to approximately 29.95 billion roubles, the daily average turnover being at the level of 1.66 billion roubles (about 57.03 billion roubles, as compared to the daily average turnover of billion roubles in October). Thus, the investors’ activity in November was much lower than in October. In November, two actions auctions were held for additional placement of OFZ-PD (Issue 25058) and OFZ-AD (Issue 46017). The volume of these two issues amounted to 10 billion roubles and billion roubles, respectively, while the actual volumes placed amounted to 2.026 billion roubles and 1.24 billion roubles. The weighted average yields of these issues on the auction were 6.4% and 7.15% per annum, respectively.
As of 28 November, the GKO-OFZ market volume amounted to 691.33 billion roubles in face value and 692.55 billion roubles in market value. The GKO-OFZ market portfolio’s duration was 1877.days.
The corporate securities market The situation on the share market.
Throughout the month, the Russian share market was demonstrating positive changes, nearly approximating the historic peaks achieved in early October. The higher certainty promoted the return of foreign investors, who had previously been abstaining from active transactions, onto the developing markets, including the Russian market. At the same time, growth was being restricted by the downward trend in the prices of oil and energy carriers on the international market. During the month’s second week the market became consolidated at the existing levels, without any further price fluctuations. In absence of significant domestic news the investors were following more closely the situation on the international stock and oil markets. While the stock markets were displaying favorable changes, prices on the oil market were going down. A similarly negative response was displayed by the market to the newly published information concerning a possible delay in the market liberalization of the “Gazprom”’s shares until next year, despite the expectations that this was going to happen before this year’s end.
During the month’s second half, the Russian share market demonstrated continuing growth, promoted by favorable external and internal factors. Thus, the market was supported by the resumed growth in oil prices after the information was released concerning the volume of oil product reserves in the USA, as well as by growth in the prices of metals and the reshuffles within the RF Government.
The positive changes on the US stock market were also contributing to a growing demand for Russian shares. At the same time, marker growth was being restricted by the rather complex situation as regards money liquidity: the interbank credit rates were still rather high. While being influenced by all these factors, the market approached very closely its historic highs and began to consolidate at this level. It should be noted that the market changes during the month’s third week were influenced mainly by the news in respect to the “Gazprom”, the most important among these being the approval, in the first reading, of the amendments to the Federal Law “On gas supplies” by the State Duma, immediately followed by a dramatic surge of the quotations of this gas monopolist’s shares, promoting also the purchases of other securities.
On the whole, in the period from 1 through 28 November the RTS index grew by 11.21% to 1039,80 points, or 104.81 points in absolute terms. During the same period, the turnover volume in respect of the shares incorporated in the RTS index was $710.878 million, the average daily turnover being at the level of $37.41 million (against $1.019 billion in October, when the average daily turnover was $50.95 million). Thus, in November the volume of trade declined, as compared with October. The indices of maximum and minimum turnovers in the trade system in November were $60.million (on 15 November) and $23.06 million (on 8 November), respectively, against $89.5 million è $22.83 million in October.
100 1 100.The total volume of trading ($) 1 050.1 000.The RTS Index 80 950.900.850.60 800.750.700.40 650.600.550.20 500.450.400.350.FIGURE 4.
Dynamics of the Russian Blue Chips from October 28 to November 28, 40.0% 30.0% 20.0% 10.0% 0.0% Change in price (%) Judging by the month’s results (from 28 October to 28 November), all the rates of all “blue chips” were growing. The leaders in terms of price growth in November were the shares of the RF Sberbank and the GMK “Norilskii Nikel” (Nornikel), whose rates in one month went up by 30.13% and 20.42%, points mln US dollars s 01.10.19.10.04.11.23.11.09.12.28.12.21.01.08.02.25.02.16.03.01.04.19.04.06.05.25.05.10.06.29.06.15.07.02.08.18.08.05.09.21.09.07.10.220.127.116.11.Ukos Tatneft Sibneft GMK LUKoil Russia Russia NorNikel RAO UES Mosenergo Rostelekom Sberbank of Surgutneftegas respectively. Somewhat lower growth rates were demonstrated by the shares of the “Surgutneftegas”, the “Ukos”, the “Rostelekom” and the “Tatneft” (their prices changing by 15.93%, 13.78%, 12.77% and 10.16%, respectively). These were followed by the shares of the “RAO UES Russia” (8.57%), the “LUKoil” (7.81%), the “Mosenergo” (4.35%) and the “Sibneft” (1.39%).
In November, the leaders in the RTS turnover6 were the shares of the “LUKoil” (59.87%), the “RAO UES Russia” (4.64%) and the GMK “Norilskii Nikel” (1.68%). Thus, the aggregate share turnover of these three issuers amounted to about 66.19%. Besides, among the RTS turnover leaders, as seen by the weekly trading results during the month, there were the shares of the “Transneft”, the “Rostelekom” and the GMK “Norilskii Nikel”.
As of 28 November, the five leaders in terms of capitalization on the domestic share market were as follows7: the “LUKoil” – $49.14 billion, the “Surgutneftegas” – $37.81 billion, the RF Sberbank – $21.07 billion, the “Norilskii Nikel” – $18.54 billion, the “Sibneft” – $17.31 billion.
The futures market. In November, the investors’ activity on the RTS futures market (FORTS) became somewhat lower, as compared to that in October. Thus, during the period from 1 through November, the aggregate turnover of the RTS futures and options market amounted to approximately 87.81 billion roubles (203.4 thousand transactions, 5.12 million contracts, against 99.24 billion roubles (233.89 thousand transactions, 6.31 million contracts) in October.
The highest demand displayed by the market participants was for futures: the volume of trade in futures during the period under consideration amounted to 78.69 billion roubles (191.83 thousand transactions and 4.48 million contracts). Options were in much lesser demand – the volume of trade in them amounted to approximately 9.12 billion roubles (11.58 thousand transactions and 643.5 thousand contracts). The peak trade volume on the futures market was 5.82 billion roubles (achieved on 2 November), while the lowest trade volume was 3.46 billion roubles on 8 November.
The corporate bonds market.
In November, the situation on the market of corporate and regional bonds did not demonstrate any significant changes, as compared to that in the preceding month. Thus, early in November the market displayed a slight growth in quotations in face of a somewhat improved banking liquidity, despite a rather noticeable strengthening of the exchange rate of the USD in respect to the rouble and the high volatility of the international debt market. Besides, the commentaries of the USA FRS’s representatives following the eventual increase of the interest rate, were the evidence of the orientation of the US monetary authorities toward a further gradual increase of the interest rate. Later on, bond prices began to go down, with the resulting compensation of the growth early in the month. The factor represented by a weakening position of the rouble in respect to the USD – a trend that in the month’s second week became dramatically enhanced in face of a dramatic strengthening of the USD on the currency market – became more prominent. The rates on the interbank market were also growing, which did not contribute to any improvements in the existing situation.
Early in the second half of the month, changes in prices remained insignificant and multidirectional.
The unfavorable situation in terms of liquidity and the behavior of the currency market were supplemented by a rather high volume of placements on the primary market. At the same time, toward the month’s end the market displayed a moderate growth in quotations resulting from the improving situation on the external debt market, as well as the stabilization of the USD/ rouble exchange rate.
Between 1 and 25 November, the price index of the corporate bonds tradable on the MICEX8 went down by 0.32 points (-0.28%), whereas the index of the ten most liquid bonds of the corporate sector grew by 1.22 points (0.36%). During the period under consideration, the aggregate turnover in the corporate bonds section of the MICEX amounted to 12.85 billion roubles, with the average daily turnover being at the level of 714.02 billion roubles (as compared to approximately 12.07 billion roubles, with the average daily turnover of 635 billion roubles, in October). Thus, the trade turnover of Russian corporate bonds became slightly higher than that in October.
On the classical share market.
According to the RTS’ data.
This was calculated on the basis of the indices of the corporate bonds tradable on the MICEX, generated by the “Zenit” Bank.
FIGURE Dynamics of corporate bond indices 122.ZETBI-Corp ZETBI-Corp18.104.22.168.22.214.171.124.104.The external factors influencing the changes on the Russian stock market.
The situation on the global oil market remained, on the whole, moderately favorable throughout the month. In the month’s first half, oil quotations were going all the way down to their four-month lows.
This was due, among other factors, to the relatively warm weather in the USA, resulting in a lower than usual consumption of fuel and an increase in the aggregate reserves of oil products. At the same time, in the latter half of the month the prices demonstrated a slight upward adjustment in the expectation of colder temperatures in the USA, with growing demand and diminishing oil product reserves in that country as a consequence.
190% Dow Jones Industrial Average 180% NASDAQ Composite The RTS Index 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% The situation on the international stock markets in November was, as before, rather favorable (see Table 1). Thus, the basic stock indices in the majority of developed and developing countries in No01.10.19.10.04.11.23.11.09.12.28.12.21.01.08.02.25.02.16.03.01.04.19.04.06.05.25.05.10.06.29.06.15.07.02.08.18.08.05.09.21.09.07.10.126.96.36.199.30.09.21.10.11.11.02.12.23.12.13.01.03.02.24.02.16.03.06.04.27.04.17.05.07.06.28.06.19.07.09.08.30.08.20.09.11.10.01.11.22.11.vember became noticeably higher. One of the factors responsible for the steady growth in these indices in developed countries was the lowering oil quotations, which also represent one of the factors that will possibly produce the slowdown in global economic growth. Besides, the eventual increase in the interest rates in the USA, firstly, promoted investments in US assets, and secondly, resulted in capital redirection toward developing markets. In this connection, the stable growth of the US stock market was contributed to by the positive commentaries of the monetary authorities as to their control over inflation processes, as well as by the publication of a vast body of positive macroeconomic statistics.
On the whole, throughout November the Russian financial market was being positively influenced by external factors. Against the backdrop of positive domestic news all this resulted in revived activity on the share market, whose indices approximated their absolute historic peaks in Russia..
Open Joint-Stock Company “LUKoil” In October 2005 the volume of trade in the securities issued by the Open Joint-Stock Company “LUKoil” on the London Stock Exchange (LSE) amounted to $4,657 billion, or about 27% of the total volume of trade in the securities of all foreign companies. The number of transactions in the “LUKoil”’s securities was 11,655, which made this company the absolute leader in respect of this index as well. It is noteworthy that the “LUKoil”, in August 2002, had become the first Russian company ever to achieve full secondary listing on the LSE.