Post by pieter on Oct 11, 2008 3:43:45 GMT -7
Russia approves $86bn bank rescue
Russia's lower house of parliament, the Duma, has approved a raft of
measures worth $86bn (£51bn) to assist banks hit by the credit freeze.
The government will make $50bn available to banks and firms that need
to refinance foreign debt. The rest will be available as loans to banks.
The package is designed to restore confidence in Russian banks and
revive shares, which have seen steep falls.
Trade on Russian stock exchanges has been suspended since Wednesday.
Trading in the Moscow Interbank Currency Exchange (Micex) index and
the Russian Trading System (RTS) exchange was stopped after falls of
more than 10% in the first hour of trade on Wednesday.
The Micex was scheduled to reopen on Friday.
But fears that Russian shares would be dumped after a climate of fear
saw a rout across European and Asian stock markets, prompted the
order from the regulator, analysts said. "The RTS and MICEX will not be
able to escape contagion from the rest of the world," Uralsib strategist
Chris Weafer said.
Liquidity problems
The falls in Russia and elsewhere have been blamed on panic selling
by global investors fearful of a deep worldwide recession.
Russian shares were also hit in August amid concerns about the conflict
between Russia and Georgia.
The steep decline in oil prices has also taken its toll with energy firms
accounting for about two thirds of the Russian stock indexes.
Analysts say the falls have been exaggerated as a number of Russian
oligarchs have faced margin calls on loans that they took to expand
their business interests. The forced sale of shares they had used as
collateral for the loans has played a part in depressing stocks.
Source: news.bbc.co.uk/2/hi/business/7662839.stm
Russia's lower house of parliament, the Duma, has approved a raft of
measures worth $86bn (£51bn) to assist banks hit by the credit freeze.
The government will make $50bn available to banks and firms that need
to refinance foreign debt. The rest will be available as loans to banks.
The package is designed to restore confidence in Russian banks and
revive shares, which have seen steep falls.
Trade on Russian stock exchanges has been suspended since Wednesday.
Trading in the Moscow Interbank Currency Exchange (Micex) index and
the Russian Trading System (RTS) exchange was stopped after falls of
more than 10% in the first hour of trade on Wednesday.
The Micex was scheduled to reopen on Friday.
But fears that Russian shares would be dumped after a climate of fear
saw a rout across European and Asian stock markets, prompted the
order from the regulator, analysts said. "The RTS and MICEX will not be
able to escape contagion from the rest of the world," Uralsib strategist
Chris Weafer said.
Liquidity problems
The falls in Russia and elsewhere have been blamed on panic selling
by global investors fearful of a deep worldwide recession.
Russian shares were also hit in August amid concerns about the conflict
between Russia and Georgia.
The steep decline in oil prices has also taken its toll with energy firms
accounting for about two thirds of the Russian stock indexes.
Analysts say the falls have been exaggerated as a number of Russian
oligarchs have faced margin calls on loans that they took to expand
their business interests. The forced sale of shares they had used as
collateral for the loans has played a part in depressing stocks.
Source: news.bbc.co.uk/2/hi/business/7662839.stm
