Bloomberg
William Mauldin
October 24, 2008 10:20 EDT
Russian stocks tumbled with equity markets around the world, capping a tenth straight weekly decline on falling crude prices and renewed turmoil in the country's bond and currency markets.
OAO Sberbank, Russia's biggest bank, plunged 24 percent as the yields climbed on Russian government bonds. OAO Rosneft fell with oil futures.
The ruble-denominated Micex Index slid 14 percent to 513.62, posting its tenth consecutive weekly decline. The dollar-based RTS Index sank 14 percent to 549.43. Both the Micex Stock Exchange and the RTS halted trading twice, saying they would resume on Oct. 28 or when directed by regulators.
The yield on the benchmark Russian 30-year bond climbed to 12.49 percent, the most since 2001, after Standard & Poor's yesterday cut the outlook on Russia's credit rating to ``negative'' from ``stable.'' The ruble weakened to 27.09 to the dollar, the lowest since 2006.
``The sum of all fears is driving asset prices down -- oil, defaults, ruble-devaluation risk and the fear of a massive cut in earnings growth,'' said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow. ``For investors oil is the critical factor as everything hinges on the amount of oil revenue that the country earns.''
Crude for December delivery fell $3.14, or 4.6 percent, to $64.70 a barrel in New York on concern OPEC's output cut, announced today, won't stem the slide in prices and demand.
Sberbank, VTB Group
Rosneft, Russia's biggest oil company, fell 14.2 rubles, or 14 percent, to 84 rubles, a record low.
Sberbank dropped 5.55 rubles to 17.50 rubles, or 84 percent below its July 2007 high. VTB Group, the second-biggest bank, slipped 0.3 kopek, or 9.4 percent, to 2.99 kopeks. A kopek is one hundredth of a ruble.
Russia's RTS Index is trading at a price-to-earnings ratio of 3, compared with a ratio of 12 a year ago, according to data compiled by Bloomberg.
``As with the equities, there are bonds out there trading hands at prices far below what their fundamentals would suggest, said Ron Smith, chief strategist at Alfa Bank in Moscow. ``The markets haven't been about fundamentals since August.''
http://www.bloomberg.com/apps/news?pid=20601085&sid=a7ha6EkR8S3k&refer=europe
William Mauldin
October 24, 2008 10:20 EDT
Russian stocks tumbled with equity markets around the world, capping a tenth straight weekly decline on falling crude prices and renewed turmoil in the country's bond and currency markets.
OAO Sberbank, Russia's biggest bank, plunged 24 percent as the yields climbed on Russian government bonds. OAO Rosneft fell with oil futures.
The ruble-denominated Micex Index slid 14 percent to 513.62, posting its tenth consecutive weekly decline. The dollar-based RTS Index sank 14 percent to 549.43. Both the Micex Stock Exchange and the RTS halted trading twice, saying they would resume on Oct. 28 or when directed by regulators.
The yield on the benchmark Russian 30-year bond climbed to 12.49 percent, the most since 2001, after Standard & Poor's yesterday cut the outlook on Russia's credit rating to ``negative'' from ``stable.'' The ruble weakened to 27.09 to the dollar, the lowest since 2006.
``The sum of all fears is driving asset prices down -- oil, defaults, ruble-devaluation risk and the fear of a massive cut in earnings growth,'' said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow. ``For investors oil is the critical factor as everything hinges on the amount of oil revenue that the country earns.''
Crude for December delivery fell $3.14, or 4.6 percent, to $64.70 a barrel in New York on concern OPEC's output cut, announced today, won't stem the slide in prices and demand.
Sberbank, VTB Group
Rosneft, Russia's biggest oil company, fell 14.2 rubles, or 14 percent, to 84 rubles, a record low.
Sberbank dropped 5.55 rubles to 17.50 rubles, or 84 percent below its July 2007 high. VTB Group, the second-biggest bank, slipped 0.3 kopek, or 9.4 percent, to 2.99 kopeks. A kopek is one hundredth of a ruble.
Russia's RTS Index is trading at a price-to-earnings ratio of 3, compared with a ratio of 12 a year ago, according to data compiled by Bloomberg.
``As with the equities, there are bonds out there trading hands at prices far below what their fundamentals would suggest, said Ron Smith, chief strategist at Alfa Bank in Moscow. ``The markets haven't been about fundamentals since August.''
http://www.bloomberg.com/apps/news?pid=20601085&sid=a7ha6EkR8S3k&refer=europe
