MOSCOW — Russia’s benchmark RTS stock index broke through a psychological barrier of 900 points last Friday. The rise was fuelled by high oil prices and fundamental underestimation of many Russian issuers. All this created such a strong demand for Russian shares which was last seen in Russia seven years ago, on the eve of the August 1998 default, the Kommersant newspaper reports.

It is foreign investors who’ve been behind Russia’s stock rally over the past two months. This is clear from high trading volumes on the RTS and gaps between the prices of depositary receipts traded abroad and share prices on the home market. On Friday, the trading volume on the RTS classic market exceeded $101 million. Such active trading has not been seen here since May 1998.

“Starting from September-October, investors usually re-assess their positions for next year. The situation on the energy and metals market, except steel, remains positive, and forecasts for next year may be optimistic. Besides, sovereign bonds are at their all-time highs. This can make investors review the value of capital for Russian companies, which will have a significant impact on fundamental share prices,” said Andrei Gromadin, analyst at MDM Bank.

Friday’s breakthrough was a predictable development, with the index at 899.47 points at 13:42 Moscow time on Thursday, analysts say. Absence of bad news, high oil prices and high liquidity have a good impact on the market, and most analysts expect the RTS index to rise further.

The 900 point mark is an all-time high. The index dropped to its all-time low of 37.74 points on October 2, 1998. On June 24 1996, it rose above 200 points, and it broke through 500 points on July 25 1997. Last month, Russia’s benchmark stock index rose above 800 points. Though, experts note that methods used to calculate the RTS index have been changed repeatedly, and comparing with previous years could be not quite correct.