Thursday, September 11, 2008

Russian Stock Market Hitting Skids......

The Russian stock market is looking so desperate the government is considering using sovereign wealth fund money to prop up investors. Russia’s energy intense market has gotten slammed since oil’s big summer pullback. Coupled with a globally unpopular war in Georgia, a quick look at the RTS Index says it all… money is racing for the exits in Mother Russia.
The RTS Index fell 7% on Tuesday, as commodities retreated, global markets declined and credit conditions in Russia worsened. “President” Medvedev responded by pumping $10 billion in the market to improve liquidity, the biggest such cash injection in over a year. Russian investors returned that favor by selling the market down another 5% yesterday.
So this morning, Finance Minister Alexei Kudrin said he is mulling “a proposal to place pension fund money and national wealth fund money on the domestic market.”
Using SWF profits to prop up domestic equities? It’s a brave new world.

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