Russian Weekly Monitor: The global environment is currently not particularly supportive of
Russian assets.

POLITICS AND ECONOMICS

The latest developments in the banking sector have impacted all
financial market segments, as two associated banks have collapsed. The
situation can be readily resolved, however, and we don\'t anticipate any
snowball effect.

According to the latest data from Goskomstat, inflation crept up
0.7% month-on-month in May, which is slightly lower than April\'s rise of
1.0%.

FIXED INCOME & FX MARKETS

Last week the Eurobond market demonstrated mixed dynamics, with
prices for sovereigns hovering in the range of -0.3-0.7%, while the EMBI
Global Russia sovereign spread contracted by 9 bps over the week.
Corporate papers shed 0-2.0%, with banking and MTS issues suffering the
greatest declines.

Sovereign rouble bonds declined by -0.3-2.0%, with average weekly
turnover remaining at 1.6 Rub bln. Regional rouble bonds declined by
0.5-2.0% over the week, with average weekly turnover falling by 13% to
the level of 920 Rub mln while corporate rouble bonds fell by 0.2-0.9%
w-o-w for first-tier bonds and by 0-2.0% for second and the third-tier
papers.