By Chris Bird
KIEV, Aug 13 (Reuters) - Investors in a belt of ex-Soviet
states around Russia were shaken though not panicked by the
fallout from the plunge in Moscow's financial markets on
Thursday, economists said.
"There's been a calm reaction here to Russian events," said
Madina Duzhimova, research director for investment house
Kazkommerts Securities in Kazakhstan's financial capital Almaty.
Stocks plunged in Russia, with trade suspended on the
benchmark RTS trading system for a short time, while yields on
short-term debt soared to 210 percent from Wednesday's previous
28-55 percent range.
Most foreign investors see the economic fortunes of Moscow's
former colonies being closely linked to Russia's despite major
differences between them.
Kazakhstan's tenge currency and debt have remained
remarkably stable despite the jitters in emerging markets across
the globe, though earlier this month the Central Asian state's
central bank hiked its key refinancing rate to 20.5 percent from
18.5 percent.
Billions of dollars in investment have begun to flow into
the republic's oil and gas industry.
"I think Kazakhstan has started to pull away from Moscow,"
Duzhimova said. "But the Russian market still has a strong
psychological effect," she said.
But away from the parched Kazakh desert and west across the
steppes to Ukraine, talk of a threatened rouble devaluation and
the renewed spectre of a cash crunch -- the government has to
find $500 million to redeem bonds this month -- boded ill for
that country's economic fortunes.
"Foreigners have reacted, there have been a lot of sell-offs
as people are leaving markets in Russia," said Tomas Fiala, head
of investment house Wood and Company in the Ukrainian capital
Kiev.
Fiala predicted Ukraine's central bank would be prompted to
raise interest rates once more to try and persuade investors to
stay in the debt market. He said yields on short-term treasuries
in the secondary market were 65-70 percent, up from around 55-60
percent earlier this week.
While they can take days rather than seconds to react,
Ukraine's share and debt markets track the Russian market in
slavish fashion.
Ukraine's benchmark PFTS share index closed down 12 percent
on Thursday.
"If the rouble goes (devalues), then the hryvnia (Ukrainian
currency) will have to go too," said Fiala, explaining that 40
percent of Ukraine's foreign trade was with Russia.
Belarus, where President Alexander Lukashenko is attempting
to maintain a Soviet-style planned economy, appeared to soldier
on heedless of Asian and Russian dominoes in emerging markets.
The head of the Belarussian state securities commission,
Valery Kulazhenko, said foreign investors' holdings of stocks in
the republic had risen in value to 300 billion Belarussian
roubles compared with 237 billion roubles last year.
But when the inflation-prone "zaichik" -- or "hare" as the
Belarussian rouble is nicknamed -- is converted into dollars,
this foreign investment is valued at just $3.5 million.
((Kiev Newsroom, +380 44 244 9150
e-mail:kiev.newsroom@reuters.com))
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