Analysis

	Market Summary – Special Issue from March 17th, 2008.

Panic is starting to reign in the world market. During the weekend (!) the USA FRB at an extraordinary meeting reduced the discount rate by 0.25%, and that’s just two days before the regular meeting, which is expected to reduce the discount and basis rate by at least 0.75%. The US dollar fall is continuing with a growing speed. The stock indexes of the world leading stock markets are declining. The Russian stock market lost all its little gains of the last few weeks and got back to the depressive January situation. The RTS Index dropped by 2,000 points. Gold was trading over 1,030 dollars per troy ounce, silver – over 21 dollars, oil – 110 dollars per barrel. However, this process did not continue. The Bear Stearns bankruptcy and its sale for a symbolic amount of less than 300 mln. dollars resulted in withdrawal of investors from high-risk assets, which can now be considered almost any shares. The similar situation with Societe Generale not so long ago resulted in an extraordinary reduction of the rates in the USA. A splash of purchases following it could not break the long-term trend. It’s obvious that the FRB actions are rather increasing the nervousness of the market than contribute to its restoration and normal functioning. Due to US dollar sales, the Yen has increased to 95.71. The 100 Yen per dollar mark has been overcome for the first time since 1995. The pound-Yen cross declined over three hours of the Asian session for almost 800 points, from 200.21 to 192.46. The Euro reached 1.59. The Swiss franc now is more expensive than the dollar by 4 cents, with a low at 0.9612. Apparently this is not all. The futures on the American and European indexes are growing low in anticipation of the rate reduction, but this growth is quite speculative and unstable. The profit reports of the major US investment banks, which will be made public this week, may add to the troubles of shareholders and carry trade players. They say an intervention by the Central Banks is possible in the situation in the currency markets, but this hasn’t happened yet. So, we are up for interesting times.