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Market Opinion

by Kathy Penchuk

Thursday, March 16, 2000

As requested, a Glossary of Terms Used in the March 13^th (intended, by the way, to be positive and upbeat, but seen by some as cynical and sarcastic - sorry).

Yakutian agrobonds:  Bonds issued (in 1998) by the republic of Yakutia (Sakha, if you want to be p.c.).  At the time, many of the Russian Federation’s other republics also issued agrobonds, in varying tranches, with varying maturities, etc.   Background is as follows.  In 1997, the government extended the maturity (by 3 years) of agricultural support loans which selected republics had received the previous year; these loans were restructured into bonds, with the intent that each bond issue be redeemed by the republic, to the Ministry of Finance.  The Yakutian ones were somewhat popular since the assumption was that a republic with diamond reserves like that would have cash flow sufficient to pay off its bondholders.  Sounds kind of like the old bridge these days, but rather a sexy instrument at the time.  I believe everybody and his brother has defaulted on the things by now. 

Svyazinforms:  Telecomm companies.   Svyazinform is a compound word -- svyaz means connection, communication; inform=information.   A Russian telecomm company’s name is usually preceded with the name of the relevant republic, city, or region, i.e. the telecomm company for the city of Chelybinsk is Chelyabinsk-svyaz-inform [parentheses mine].

ADRs:  American depositary receipts, specifically, those ADRs issued by Russian companies throughout the 1990s.    ADRs are securities issued and traded in the U.S. market as share proxies by companies who can’t list in the U.S. directly.  There had been some panic recently that Russian courts would decide to invalidate these ADRs, thereby leaving U.S. investors in the lurch.

Zakuski:   Appetizers; the very sumptuous first course of a Russian meal.

RDRs:   Russian depositary receipts, a concept similar to ADRs, but in reverse.   Last year, a group of banks had wanted to create a product, intended for sale to Russians, which would act as a proxy on the U.S. stock market, or groups of companies, rather than any one company in particular.   Anyone know if this ever happened?

Kathy Penchuk,
New York City
email: KPenchuk@hotmail.com

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