Emerging markets trading halts for holidays; Turkey close to IMF loan; ruble devalues again

By Aaron Hochman-Zimmerman

New York, Dec. 24 - Emerging markets trading was nearly non-existent on Christmas Eve 2008 as it seemed that hardly a creature was stirring around New York's Wall Street and Financial District.

Investors, who had dragged through a very slow year in 2008, were in no mood to press the issue of trading into the last hours of a shortened holiday session.

"It never even opened," a buysider said.

Some news from the local markets trickled in, but few were around to notice as Turkey announced that it entered the final stages of negotiation for a $20 billion to $25 billion loan from the International Monetary Fund - or news of another political scandal unfolding in Argentina.

The slow U.S. market traded slightly higher on more negative employment and consumer spending data.

With stocks up, volatility fell by 0.81 to 44.21, according to the VIX index. The index is a common measure of market volatility.

Emerging Europe desks empty

Trading in emerging Europe was all but closed for the season by Tuesday and most traders were long gone for the holidays by Wednesday's abbreviated session.

Still in Turkey, the government is close to finalizing a deal for a $20 billion to $25 billion loan with the International Monetary Fund, said economy minister Mehmet Simsek, according to the Hurriyet Daily News.

Simsek said he would like to bring a completed deal to the Turkish people after a January meeting of IMF and Turkish economic officials in Ankara.

In Russia, the central bank devalued the ruble again dropping it to 28.728 against the dollar.

The reduction is the third this week and it put the currency at its lowest exchange rate to the dollar in nearly three years.

Meanwhile, the government also signed a treaty allowing for the purchase of a 51% stake in Serbia's national oil firm Naftna Industrija Srbjie by Russia's OAO Gazpromneft.

In exchange for the stake, Serbia will receive €400 million and a €500 million investment in an oil storage facility.

The Russians will also build and take control of a 400 kilometer section of the South Stream pipeline which will run through Serbia into Southern Europe. The pipeline is expected to be completed in 2015.

New scandal for LatAm

Elsewhere, in time for Christmas, Latin America began hearing about another political scandal.

In Argentina, an investigation is slated to begin into corruption allegations surrounding president Cristina Kirchner's husband and former president Nestor Kirchner.

Some of the charges championed by former presidential candidate Elisa Carrio allege that Kirchner awarded major oil drilling contracts in exchange for monetary gain.

Investigators will also examine a possibly illicit deal for Argentina to buy oil from Venezuela in exchange for Venezuelan promises to buy Argentine manufactured goods.

Poor numbers in Asia

Asia, which had lagged the other sectors in the last days of active trading, reported more negative economic data as the market wound down for Christmas.

In the Philippines, the government reported sinking import numbers during October, according to a statement from the National Statistics Office.

Weaker demand cut imports 11.1% in October to $4.6 billion, compared to October, 2007.

The October numbers left the year to date total 9.8% smaller than the same period of 2007.

Electronics was still the chief import, making up 35.6% of the goods brought into the country, but the dollar value fell by 30% to $1.6 billion compared to October, 2007.

Also in Indonesia, the country's industrial sector saw 18% less investment during 2008 and further losses are expected in the new year, the Industry Ministry said, according to the Jakarta Post.

Total investment from foreign and local sources shrank to $5.9 billion from $7.2 billion in 2007, the report said.

However, foreign investment grew by 1% to $4.7 billion, while domestic investment sank by 50% to $1.2 billion.

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