Voucher Soars to Ruble High

The ruble value of the privatization voucher broke a three-month-old record this week, but experts disagreed as to whether the new high reflected confidence in Russia's privatization program.


On the Russian Raw Materials and Commodities Exchange, the country's leading venue for voucher trade, the voucher hit 34,410 rubles ($19.82) on Tuesday, well above its Nov. 9 record of 30,660. The voucher first entered record territory on Monday, trading at an average of 31,390 and ending a long period of minor fluctuations around 25,000 rubles.


Traders broke out champagne and started dancing on Monday when the voucher topped the 30,000-ruble mark.


While some experts attributed the voucher's newfound strength to growing demand for shares in large energy and industrial companies scheduled to be privatized, others said that the voucher market is too heavily manipulated to be an indicator of interest in privatization.


Ilya Rybin, head of the stock department at the Central Russian Universal Exchange, Moscow's second voucher trade venue, said the announcements of several major privatizations, including United Energy Systems, petroleum giant Lukoil, Rostelecom and the Bratsk Aluminum Factory, had fueled demand for the nation's most liquid security.


He said privatization chief Anatoly Chubais and other officials had bolstered confidence in the market by assuring the public that enterprises slated for sell-offs would hit the block before July 1, the day that the vouchers expire.


"Demand went up because they said that everything will be sold before the expiration date, and there are less vouchers left," Rybin said.


Theoretically, voucher supply dwindles and more enterprises hit the auction block, the price of the voucher should rise drastically. According to various estimates, between 15 and 40 percent of the 144 million vouchers issued to every Russian man, woman and child in October 1992 are still in circulation.


But the voucher's performance in dollar terms has been far from stellar. At Tuesday's high, the voucher's value was only $19.82, compared to about $26 in November. When the government first issued the vouchers, their 10,000-ruble face value was worth about $40.


Alexander Kolankov, deputy director of the Analyse privatization brokerage, said commercial banks and voucher funds have kept the price down to maintain control over the market. He said they manipulate the exchange price to set a profitable rate for their own trades, most of which occur off the exchange, pushing the price up when they need to sell and deflating the price when they need to buy. A higher voucher price would make such manipulation more expensive.


"The powers that be are not interested in a very high price," he said.


Kolankov disagreed with Rybin's analysis of the voucher's latest rise, saying it had little to do with the government's privatization program.


"The rate of the voucher is not connected with any economic or political factors," he said. "It's purely a game."


Rybin countered that market speculation was normal practice throughout the world, and that the banks' and funds' trades ultimately must reflect wider trends in supply and demand.


"Of course it's a game," he said. "But supply and demand still exist and that influences the market."


Alexander Deduchenko, executive director of the Russian Raw Materials and Commodities Exchange, said he expected the voucher to continue its rise as Russia's privatization program nears its July 1 deadline.


"We expect more records in the coming weeks," he said.