MOSCOW, Jan. 2 (Xinhua) -- Investors as well as authorities have predicted a bright 2010 stock market in Russia which just saw solid gains as the benchmark Russian Trading System (RTS) index and the Moscow Interbank Currency Exchange (MICEX) rose more than 120 percent for 2009.
BEST GAINS IN YEAR
The RTS and MICEX shed over 70 percent in 2008 as the global financial crisis spread to Russia.
The Russian market pulled off a stunning recovery in 2009, with the RTS climbing 128.62 percent from its close on Dec. 31, 2008 to 1,444.61 points to post the biggest jump among major indexes all over the world.
The MICEX was up 121.1 percent to close at 1,370.01.
Top gainers for 2009 are bank and telecommunication shares.
Russia's largest bank Sberbank surged 260 percent, and its preferred stock recorded a whopping gain of 660 percent.
Some regional telecommunication companies also saw eye-popping upsides in stocks. Southern Telecom went up 563 percent, and Volgaand Far East telecoms jumped over 400 percent respectively.
Other well-performing stocks included oil giant Rosneft that gained 127 percent and Norilsk Nickel with a rise of 112 percent. Lukoil, Russia's largest oil company, and state gas monopoly Gazprom climbed 75 percent and 69 percent respectively.
MAIN DRIVING FORCES
The Russian stock market's annual advance was believed to have been driven by two main factors.
First, the Russian government took a series of measures to bolster the market.
Russia's underdeveloped banking sector bore the brunt of the global economic crisis, with small and medium-sized banks going bankrupt and large banks suffering a severe credit crunch.
The Sberbank's stock plummeted 77 percent in 2008 as the Russian ruble depreciated 50 percent in the fourth quarter of 2008, causing a panic in the Russian financial market.
The Russian government pumped a large amount of money into the banking system under this critical circumstance. The authorities also provided guarantees for large banks so as to ensure the stability of the market and the safety of citizens' deposits.
Russia's central bank intervened in the foreign exchange market to stabilize the value of ruble, leading to a rebound in financial stocks.
As the Russian economy showed signs of a weak recovery in the second half of 2009, the market regained confidence and financial stocks took the lead in the massive bounce-back.
Price hikes for commodities contributed to the spectacular rebound as well. The global economy recovered from the recession at the end of 2009, spurring an increase in the demand for energy, metals and other natural resources.
The U.S. dollar's weakness throughout much of 2009 also gave the market a strong boost on hopes about energy exports. Resources stocks, which were hit hardest in 2008, became the bellwether in the market in 2009.
UPBEAT ABOUT OUTLOOK
Analysts take different approach toward the Russian stock market, with some calling it a bull market and others labeling it as a "bear market rally."
Nevertheless, both officials and analysts are upbeat about the outlook for the Russian financial market in 2010.
Deputy Prime Minister and Finance Minister Alexei Kudrin said earlier that the Russian financial market has emerged from the crisis and entered a new stage.
Media reports said the RTS will soon start calculations of a new index - RTS Standard, which will include 15 shares of greatest market capitalization.
Meanwhile, about 10 companies will go listing on the exchange this year. Analysts believe Russia's stock market faces good opportunities as the economy further recovers.
International investment institutions are also optimistic about the market. According to Goldman Sachs' forecast published in the fourth quarter of 2009, Russia's stock market will grow 35 percent this year, and the RTS is predicted to hit 1,700 points.
Special Report: Global Financial Crisis
