The headlines in Russia will be about the imminent inauguration of Vladimir Putin next Monday (May 7) and speculation about the make-up of the new government, which will be appointed during the same week. Both the president-elect and prime minister-elect have been spreading word of their policy priorities in recent weeks, and some individuals, widely tipped to be in the next cabinet, are also talking about their view on policy priorities and budget issues in particular. That said, nothing dramatic and few surprises are expected.

In stock terms, the trend in favor of safer domestic themes should continue, as both global concerns and tax uncertainty hangs over the extractive industry exporters. Stocks in this theme will likely see continued volatility and short-term trading opportunities, but with little prospect of a steady price appreciation until the major external risks are resolved. The exception may be Norilsk Nickel. The price of copper rose 3.2% last week and looks set for further gains on the back of concerns over supply and falling inventories. In addition, the news that Russian oligarch Alisher Usmanov is increasing his equity stake in the company (by 1.2% in the recent move) may raise speculation that the long drawn out stand-off between the two core shareholders (Vladimir Potanin and Oleg Deripaska) may be about to enter a new phase, which could lead to a final resolution.  

Take note that there will be a quiet start to the week, as Russia takes a two-day holiday to celebrate May Day. Moscow’s bourses will be closed Monday and Tuesday, while the GDR and ADR markets in London and New York will trade as usual. The local prices will adjust for the missing two days at the start of trading on Wednesday.

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