Trading in Russian shares reached record levels this week as new and veteran investors pushed share prices up nearly 20 percent, cheered by company news and political events they read as virtually assuring President Boris Yeltsin a second term in office.
The Moscow Times Index of 50 leading issues jumped 5.4 percent in dollar terms Friday alone, closing at 124.43 -- near a record high touched briefly Tuesday afternoon -- while the ruble-adjusted index rose to 285.73.
"There was a big upturn," said Bobby Meshoyrer, head of sales and trading at the Aton brokerage. "Everything across the board went up."
About $32 million changed hands Friday via the Russian Trading System, a record level since the electronic system began releasing trade data last November, according to the Skate agency. This past winter, $3 million marked healthy daily volume, and the numbers have been steadily growing.
This week, volume was about $124 million, also a likely new high.
In addition, many transactions in the most heavily traded stock, Surgutnftegaz, were executed over the counter, traders said, making turnover probably even greater than reported.
"I don't think any week this year was as busy this past week, even those busy weeks in May," Meshoyrer said, referring to last month's rally.
Positive political news was the driving force behind the activity, traders said, drawing in first-time investors who have been waiting on the sidelines for the right time to jump in.
"There were some new buyers," said Dmitry Evenko, head of sales and trading at United City Bank.
"They just reached a level of comfort to start buying after the first round [of voting], after the Lebed-Yeltsin coalition, after the government reshuffle -- the risk of Russia has diminished in a big way."
London-based and U.S. emerging markets funds were some of the new kids on the block, brokers said.
Traders attributed the rally Friday to a delayed reaction over Thursday's government shake-up, in which Yeltsin fired First Deputy Prime Minister Oleg Soskovets, the chief presidential bodyguard Alexander Korzhakov and the head of the Federal Security Service, Mikhail Barsukov.
"There was confusion among foreign investors [Thursday] -- was it good news or bad news?" said Evenko. But by Friday "from the very morning people were buying."
The firings confirmed earlier optimism -- based on Yeltsin's strong showing in the election and third-place finisher Alexander Lebed joining the presidential camp -- that Yeltsin was getting his house in order and would be rewarded in the runoff balloting.
The week's rising star was Surgutneftegaz, which rocketed 65.71 percent on the week to close at $0.435. Evenko said a number of recently published recommendations on the company -- Russia's third-largest vertically integrated oil concern -- from international investment banks helped draw investors.
The oil major also announced Monday that 1995 pre-tax profit rose to 4.04 trillion rubles from 0.54 trillion in 1994, Reuters reported.
Surgutneftegaz simply represents a smart buy, traders said.
"Surgut is one of the cheapest companies on capitalization, assets and oil reserves. It's comparable to LUKoil, yet about three times cheaper than LUKoil by capitalization," said Meshoyrer.
LUKoil, Russia's biggest oil company, was up 19.32 percent from last week, closing at $10.50. Other leading issues included St. Petersburg Telephone, up 50.31 percent to $16, and Orenburgneft, gaining 42.86 to settle at $1.90.
News that the government could soon ease Norilsk Nickel's tax burden and give it other aid worth as much as 6 trillion rubles ($1.2 billion) helped push up the metal giant's share price. The stock was up about 50 cents Friday to $9 and increased 12.50 percent on the week.
Of the MT Index stocks, 39 advanced and two shares declined with the remaining unchanged. The two decliners, Bratsky Timber and Yuganskneftegaz were down only marginally, said Anton Lobanov of Skate.
The Moscow Times Index of 50 leading issues jumped 5.4 percent in dollar terms Friday alone, closing at 124.43 -- near a record high touched briefly Tuesday afternoon -- while the ruble-adjusted index rose to 285.73.
"There was a big upturn," said Bobby Meshoyrer, head of sales and trading at the Aton brokerage. "Everything across the board went up."
About $32 million changed hands Friday via the Russian Trading System, a record level since the electronic system began releasing trade data last November, according to the Skate agency. This past winter, $3 million marked healthy daily volume, and the numbers have been steadily growing.
This week, volume was about $124 million, also a likely new high.
In addition, many transactions in the most heavily traded stock, Surgutnftegaz, were executed over the counter, traders said, making turnover probably even greater than reported.
"I don't think any week this year was as busy this past week, even those busy weeks in May," Meshoyrer said, referring to last month's rally.
Positive political news was the driving force behind the activity, traders said, drawing in first-time investors who have been waiting on the sidelines for the right time to jump in.
"There were some new buyers," said Dmitry Evenko, head of sales and trading at United City Bank.
"They just reached a level of comfort to start buying after the first round [of voting], after the Lebed-Yeltsin coalition, after the government reshuffle -- the risk of Russia has diminished in a big way."
London-based and U.S. emerging markets funds were some of the new kids on the block, brokers said.
Traders attributed the rally Friday to a delayed reaction over Thursday's government shake-up, in which Yeltsin fired First Deputy Prime Minister Oleg Soskovets, the chief presidential bodyguard Alexander Korzhakov and the head of the Federal Security Service, Mikhail Barsukov.
"There was confusion among foreign investors [Thursday] -- was it good news or bad news?" said Evenko. But by Friday "from the very morning people were buying."
The firings confirmed earlier optimism -- based on Yeltsin's strong showing in the election and third-place finisher Alexander Lebed joining the presidential camp -- that Yeltsin was getting his house in order and would be rewarded in the runoff balloting.
The week's rising star was Surgutneftegaz, which rocketed 65.71 percent on the week to close at $0.435. Evenko said a number of recently published recommendations on the company -- Russia's third-largest vertically integrated oil concern -- from international investment banks helped draw investors.
The oil major also announced Monday that 1995 pre-tax profit rose to 4.04 trillion rubles from 0.54 trillion in 1994, Reuters reported.
Surgutneftegaz simply represents a smart buy, traders said.
"Surgut is one of the cheapest companies on capitalization, assets and oil reserves. It's comparable to LUKoil, yet about three times cheaper than LUKoil by capitalization," said Meshoyrer.
LUKoil, Russia's biggest oil company, was up 19.32 percent from last week, closing at $10.50. Other leading issues included St. Petersburg Telephone, up 50.31 percent to $16, and Orenburgneft, gaining 42.86 to settle at $1.90.
News that the government could soon ease Norilsk Nickel's tax burden and give it other aid worth as much as 6 trillion rubles ($1.2 billion) helped push up the metal giant's share price. The stock was up about 50 cents Friday to $9 and increased 12.50 percent on the week.
Of the MT Index stocks, 39 advanced and two shares declined with the remaining unchanged. The two decliners, Bratsky Timber and Yuganskneftegaz were down only marginally, said Anton Lobanov of Skate.
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