24th May, 2005

The Russian equity market jolted back to life on Tuesday after many days of sluggish trading. This time there is no doubt that foreign investors got into the act. The rally was not fueled by any major news on the internal front as the market took the lead from leading western markets. It was encouraging to see that foreign investors again showed robust interest in Russian equities.

Topping the bulls was Lukoil, which was hot to trot on upbeat expectations on the eve of the release of the oil producer’s FY 2004 GAAP financials. The market consensus is looking for strong figures with revenues expected to rise 52% to $33.8 mln and net income to hit a new high of $4.1 bln. What’s more, the major is also said to be on the verge of wrapping up a deal to grab a controlling stake in Dragon Oil, which engages in E&P of crude oil on the Turkmen shelf of the Caspian shelf, thereby adding even more to the allure of the company.

There was plenty of green to be seen on the screen all the way across the board yesterday, with most RTS blue chips advancing within a band ranging from +1.57% (Sberbank) to +2.99% (Rostelecom). The RTS index moved up a healthy 3.63% to 669.65 on much heavier volumes we hadn’t seen for some time, totaling $20.7 mln.

MICEX blue chips were also in a bullish mood Tuesday, with gains ranging from +0.6% (Mosenenergo) to +4.8% (Lukoil). The MICEX index added on 3.1% to 605.32 on strong volumes amounting to $816.85 mln.

Gazprom lagged a little behind the rally and underperformed both RTS and MICEX. By yesterday’s close, gas monopoly was up 1.12% to Rub 81.1 with 19 mln shares changing hands.

Finam
Russian Brokerage Company
http://www.fin-rus.com