Marina Akopian, a partner at London-based emerging markets boutique Hexam Capital (a joint venture with Resolution Asset Management) says: 'Prices bear little or no relation to results, with sellers getting rid indiscriminately of winners and losers.' She cites potash producer UralKali, whose share price is down some 70 per cent over three months despite first-half revenue growth of 114 per cent and net income up 261 per cent year on year. 'The plunge would not have been so steep had the government done some more explaining,' says Igor Yurgens, head of government relations at Renaissance Capital, Russia's largest privately owned investment bank. 'It needs to be more open about its medium and long-term strategy - if it has one.' But this is Russia and the politics of defence are never far away. Yurgens's biggest fear is a US election result that will lead to more hardliners in Washington. 'If Nato offers quick accession to Ukraine in December there could be big trouble, making the current Georgia problem seem like a joke. We have this power, though we don't want to use it. But if there is no anti-Russian provocation, I expect the markets to start rising gently by Christmas.'

``There are two main consequences for Russia, a lack of confidence and a lack of liquidity,'' Sharonov, a deputy economy minister until resigning in July last year, said in a Bloomberg Television interview in Moscow. ``This problem is not only for financial institutions, but for the whole of industry, for the whole economy. Many companies feel these problems with debt financing.''