‘Our stock market kept going down last week because of inflation risks and growth of global interest rates, which made most of the world’s markets less attractive in terms of investments,’ says SKB-Bank’s trader Alexander Sterkhov.

‘RTS index reached 1,844.7 points at the close of business on May 17, 2007, which is 2.5% lower than at the beginning of the week. According to the Minister of Finances Alexei Kudrin, after VTB went through with the IPO, the government’s share in the bank’s stock amounted to 78%. It was also announced that 35% of shares had been offered on Russian markets and 65% had been offered at London Stock Exchange. The impressively growing demand the bank’s shares have been enjoying within the initial offering will probably support the investors’ interest in the future, which, in its turn, is likely to promote further increase in the stock price. VTB’s depositary receipts grew 8.9% more expensive against the initial price at the close of business at LSE on May 16, 2007,’ Mr. Sterkhov reports.

‘The Russian Government decided last Thursday that they had to agree on the final investment project for the country’s power engineering facilities before August 1, 2007. The major companies operating within the field (RAO UES of Russia, RosEnergoAtom, HydroOGK and some others) are estimated to require more than 380 billion RUR. Even though the government appears to be unwilling to lose control over the companies, head of RAO UES of Russia Anatoly Chubais says they might actually go for a public offering after all. I believe their shares would be a good way to invest money for the next few years,’ Mr. Sterkhov says.

‘Central Bank of China announced on May 17, 2007 that they could raise their key rates in order to keep control over inflation. This is bad news for all the developing countries’ markets. This week, we expect Russian stock market to remain within the 1,800-1,850 range (RTS index).’