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Russian stock market evening report by Veles Capital (June 23, 2009, Tuesday, 4.00 p.m. GMT)

Stocks
 
Market today. Since morning the drop to the level lower than 900 points of the RTS index. However, a share of loss in course of trades has been won back. The recovery was mainly indicated in the bank sector, VTB was positive also. Activity of the players as before is focused in Sberbank, Gazprom and Norilsk Nickel.

Market tomorrow. We do not exclude that after a two-day drop the market will take a breath. However there still is no significant positive: stats on the market of the secondary real estate market in the U.S. turned out to be positive, but still worse than expected. Due to that we do not exclude the lateral movement of the RTS index.
 

Bonds
                                                           
Market today. In the first part of the day the sellers prevailed at the market. Everything was sold – new and old issues: RZD-12, RZD-16, X5-Finance-4, VTB-5, AIZK-10 and etc. As a result the notes lost in price another 30-50 b.p. average. Non-sensitive to the total drop were the short-term issues, included in Lombard. However, by the end of the day the buyers came to the market, which pulled up the slipped prices – RZD-16 and X5-Finance. At the Russian bonds the trade during the day developed by similar scenario. At the same time the mid-term currency loans lost in price.

Market tomorrow. It is complicated to make any forecasts now. At the same time we should outline that for the debt notes, unlike the share market, there are reasonable cost levels, defined by the cost of money in the system. And while we see no growth of funding cost, there will be no serious price slips.
 

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