good news21 Sep 2007 08:12
URALSIB: 20/09/2007
RTS within 3.5% of record high. Global equities experienced the financial equivalent of an adrenalin rush yesterday, and most ended within a few percentage points of the record highs seen in July. At last night’s closing level, the RTS is within 3.5% of its record high. With US equities closing higher again, and the optimistic mood extending to Asian markets this morning, we can expected Russian shares to again open higher. The price of oil hit a third consecutive closing high on Nymex yesterday, and most base metal prices have also surged. Gains were across the board, but the main focus was again on oils, metals and banks. One negative issue is the strength in the ruble, and as that grows it will cause both inflationary pressures and cut margins for export-oriented companies; but investor focus is elsewhere at this point. The record high oil price, plus the expected management changes within the energy sector, make a tax cut across the oil sector and financial incentives to stimulate growth in that and the gas sector more likely. It is time to upgrade weightings in these sectors, especially for the state-controlled companies