Bankruptcy

Russian Markets Re-Open; Panic Ensues; Then Close

By J. Michael McBride

In a repeat of yesterday’s events, the Russian stock market re-opened only to close thereafter. ":Russian markets stopped trading for a second day after emergency funding measures by the government failed to halt the biggest stock rout since the country's debt default and currency devaluation a decade ago.

The ruble-denominated Micex Stock Exchange suspended trading indefinitely at 12:10 p.m. after its index erased a 7.6 percent gain and plunged as much as 10 percent within an hour.

The government yesterday injected $20 billion into the interbank lending market via central bank and Finance Ministry auctions in a bid to contain soaring borrowing rates as credit dried up in the wake of the Lehman Brothers Holdings Inc. bankruptcy. The one-day MosPrime overnight rate, a gauge for monitoring liquidity demand, leapt 25 basis points to a record 11.08 percent today.

The Finance Ministry attempted to stop the selloff by offering 1.13 trillion rubles ($44 billion) of budget funds to the country's three biggest banks, OAO Sberbank, VTB Group and OAO Gazprombank, for at least three months. That measure came as KIT Finance, a Russian brokerage, said it's in talks to find a buyer after failing to meet some financial obligations related to repurchase agreements."

Here is a link to one article on that subject:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIRza4.azeC4&refer=worldwide

Michael

Full post as published by Texas Lawyer Blog on September 17, 2008 (boomark / email).