SKB-Bank claims stock market is on lookout for direction

28 April 2007 (12:28)

‘RTS stock index had been going down from 2,000 points and stopped at 1,915 points; this week, the figure has been fluctuating between 1,955 and 1,990 points. Due to ambiguity of data on the world markets and lack of domestic news, the market is still looking for a direction. RTS and MICEX indices at the close of business came to 1,960.4 and 3,439.8 points respectively on April 26, 2007,’ says SKB-Bank’s trader Alexander Sterkhov.

‘President’s Putin address to the Federal Assembly has been the highlight of the week. The address covers some of the issues related to how the money accumulated within the Stabilization Fund is going to be used. The overarching idea at the moment is to direct it to social welfare programs and raising the country’s living standards. This switch from saving up to spending could support our home industry and investment business and cut back on unemployment. On the other hand, it may also lead to greater inflation rate.

I should also say that the President’s proposals on how to give people more incentives to make investments in their own future pensions should bring more money on the home equity market in the long run,’ Mr. Sterkhov observes.

‘As for the global news, things have remained quite controversial. The microeconomic statistics regarding the U.S. give little ground for optimism, whereas the companies’ growing profits push the American stock indices further up. So, the Russian stock market will probably keep fluctuating within the above-mentioned range until the U.S. Federal Reserve System meets on May 9, 2007.’

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