VZCZCXYZ0007
RR RUEHWEB

DE RUEHMO #4029 2281420
ZNR UUUUU ZZH
R 161420Z AUG 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 2985
INFO RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS MOSCOW 004029 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/IFD 
TREASURY FOR MEYER, BAKER 
 
E.O. 12958: N/A 
TAGS: EFIN ECON RS
SUBJECT: RUSSIA'S STOCK MARKETS CONTINUE DOWNWARD SLIDE IN WAKE OF 
SUBPRIME WORRIES 
 
¶1.  (SBU) The benchmark RTS Index dropped 3.6 percent for the week 
to 1829.64 near the end of the trading day on August 16.  Losses in 
Asian markets and lingering subprime concerns have prompted what 
some observers are calling a "market event."  Deutsche Bank Aleksey 
Zabotkin maintains that, broadly speaking, Russian stock valuations 
were well supported by the companies' underlying financial 
performance.  However, global liquidity questions and uncertainty 
about the scope of the subprime issue have resulted in a revaluation 
of emerging market risk. 
 
¶2.  (SBU) Many analysts have speculated that, barring an acute 
external shock, the likely bottom for the RTS Index in the current 
environment would probably reach 1850.  The drop in the per-barrel 
price of oil for much of the trading day, down nearly 3 percent, may 
have dimmed the near-term prospects of Russia's oil-heavy economy, 
thus adding to Russian investors' concerns. 
RUSSELL