Russian Stock Market Facing a ‘Leg Down’, VTB’s Soloviev Says

22 April 2009

Bloomberg, April, 22, 2009

By Laura Cochrane and Denis Maternovsky

Russian stocks, among the world’s best performers so far this year, may decline in the second half of 2009 as the country’s economy remains “under stress,” according to Yuri Soloviev, president of VTB Capital.

“I expect another leg down before the climate is right,” Soloviev, who heads the investment-banking unit of VTB Group, Russia’s second-biggest bank, said in an interview with Bloomberg News in London. “We would still need to be quite conservative going into the second half of the year and then we would probably test the low.”

Russia’s Micex Stock Index added 43 percent this year as of 5:51 p.m. in Moscow, tied with Peru’s benchmark as the best performer among 89 world stock indexes tracked by Bloomberg. It lost 67 percent last year in the country’s worst market rout since the 1998 sovereign default.

“I think the equity markets will correct this year to a significant level because we will see a lot of corporate defaults,” said Soloviev, who is also the bank’s global chief executive officer. “The real economy is still under stress, the banking sector is still under stress.”

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