Putin's pledge buoys Moscow

RUSSIAN markets bounced today after President Vladimir Putin promised to liberalise share trading in majority State-owned energy giant Gazprom, and Moody's investor services reaffirmed its recent upgrade of the country's investment ratings.

Investors, shocked by the state seizure of shares in oil firm Yukos last night, also took heart from the swift appointment of Putin loyalist Dmitry Medvedev as his deputy, following last night's resignation of Putin's pro-business chief of staff Alexander Voloshin.

Shares in Yukos were further buoyed, 7.9% to 342 roubles, after reports during the day that prosecutors had lifted a freeze on some shares of the company. Yesterday, the prosecutors impounded a 44% stake belonging to the company's detained chief executive and his allies.

Medvedev is also chairman of gas giant Gazprom, Russia's largest energy firm. Putin today announced trading in the huge firm's shares was to be opened up further to foreign and local investors.

Gazprom soared 8% on the news, underpinning the market's gains after its recent disastrous slump following the arrest of Yukos chief executive Mikhail Khodorkovsky on fraud charges.

The rouble dipped to 29.85 against the dollar versus 29.94 before last night's arrest but later recovered to 29.90. The Russian Central Bank was standing by to intervene today to prevent a further slide.

The appointment of Medvedev significantly strengthens Putin's hand in his stand-off with Russia's business elite and should strengthen the grip of his socalled St Petersburg Circle's grip on power.

Putin has also been lobbying investors in an effort to stabilise Russia's markets, meeting top investment bankers in Moscow last night.