YukosSibneft prompts record gains. (Stock markets).(Russian Trading System)

The Russian Trading System (RTS) made impressive gains, driven by the news that Yukos and Sibneft are to merge (see p1).

The index reached a high of 430.2 points on 22 April before edging back down again to end the week at 429.4 points. This represents the highest point that the benchmark Russian index has reached since November 1997. In doing so it outstripped the global trend, with gains on other markets tempered by concerns about the US economy and fears about the Sars epidemic.

Yukos is to buy out 20pc of the Sibneft stock currently held by Millhouse Capital, which owns around 90pc of Sibneft. The rate represents a 33pc premium to Sibneft's preannouncement share price, according to Alfa Bank. This high premium is justified, say analysts, by the economies of scale that the merger will create and because of the market leverage the new company will have. The rest of Sibneft will be gradually assimilated into Yukos.

Moody's, the credit rating agency, introduced a note of caution, saying that the upside of its YukosSibneft rating would be …