Market Update

RNS Number : 8777D

JPMorgan Russian Securities PLC

19 September 2008

 



JPMorgan Russian Securities plc (the 'Company')

Market Update

The Board, in close conjunction with JPMorgan Asset Management (UK) Limited (the 'Manager'), is monitoring the situation in Russia carefully in the light of the extreme volatility of the Russian market and the suspension of trading by financial regulators. Despite the suspension, the Company's shares have continued to trade normally on the London Stock Exchange and provide liquidity to both buyers and sellers. 

Russia is being impacted by both global financial turmoil and falling commodity prices, especially oil. Despite the very strong current account balance and government budget surplus, domestic credit markets are immature and under developed, which has led many Russian corporates and speculators to seek short term US dollar and margin financing. This is currently sparking margin calls and disrupting the domestic Russian capital markets. 

As experienced and prudent Russian investors, the Manager has consistently sought to hold shareholders' assets in the most appropriate vehicles and avoid unwarranted counterparty, settlement and custody related risks. The Company's portfolio is currently over 50% invested in ADRs / GDRs which continue to trade on other international exchanges. The balance is largely invested in US dollar denominated local stocks which the Manager is able to trade on an OTC basis, although liquidity is currently less than normal and on wider spreads. 

The Investment Manager continues to believe that in spite of the short term volatility, valuations are attractive and that in most cases current market prices offer attractive entry points for investors with the ability to focus on the medium to long term prospects for the Russian economy. 

19th September 2008

For further information:

David Barron and Alison Vincent

JPMorgan Asset Management (UK) Limited ......................... 020 7742 6000

 

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