The Russian market might not be at rock bottom, but it's awfully close.

The ruble is still under threat, and the road to Russia's bailout package will be bumpy and long. But for days, or weeks? That's what most fund managers are wondering about -- exactly when the dangerous game of chicken between the

International Monetary Fund

and the government will finally result in the expected $10 billion to $15 billion rescue package.

"We still like Russia and believe that it won't default, but there is more pain as they move ahead. Fasten your seat belt," says Bill Nemerever, emerging markets debt portfolio manager with

Grantham Mayo Van Otterloo

in Boston.

The nut of the remaining disagreement is that before it hands over the cash, the IMF wants Russia to become self-financing and get off the lending agency dole. For years, the IMF has allowed Russia to buy time to redeem its short-term debt obligations while sinking the government deeper into long-term hock. If Russia fails to kick its addiction, economist Stuart Brown of

Paribas

investment bank says, the government could use 77% of its total budget just servicing its debt by 1999. That's right: Three-fourths of all government tax revenue going to pay off creditors.

The darker truth is this: Russia's growth has lurched to a halt, at least according to official figures, and not accounting for the huge, untaxed gray economy. Even with a bailout, the market has begun to realize Russia's economy won't be rekindled for a year, maybe two.

Nor does it solve the underlying problems. As a result, "the market, like everyone else, is behaving like a deer caught in the headlights," says Ian Hague, partner with the top-performing Russian equities

Firebird Fund

in New York. It doesn't help that Russia's

Duma

, the lower house of parliament, today is balking at passing the IMF-mandated reforms.

More Government Meddling at Tatneft

In that kind of environment, even the best companies will have trouble keeping their heads above the water. Take big oil: Normally a heavyweight oil and gas company wouldn't be slowed by Russia's sclerotic growth. Most of their sales come from dollar-based exports. Even so, few merit close inspection.

Take the oil giant

Tatneft

(TNT:NYSE ADR). Though cheap on a relative basis, "the power behind the throne at this company is, literally, the throne," said one equity strategist with

Renaissance Capital

in Moscow.

The president of Tatarstan handpicked Tatneft's new chairman of the board at the annual meeting last Friday. The government holds a 30% stake, and still wants to

bundle Tatneft together into a large if amorphous state holding company. According to Tatneft's U.S. GAAP financials -- still a rarity among Russian companies -- the oil giant made a 1997 net profit of $10 million on revenues of $2.5 billion, versus a loss of $290 million on revenues of $2.3 billion in 1996. Not too shabby, except Tatneft's debt is hefty as well -- $828 million at the start of 1997, and this year it borrowed another $331 million. Tatneft spent $54 million just servicing its debt, not unlike that of the Russian government.

'What Is Minor Financial Growth Anyway?'

What about long-distance monopoly

Rostelecom

(

( ROS)ROS ADR)? If growth stalls, Russian consumers won't spend -- particularly on expensive phone calls. And growth likely won't come around unless the IMF wrings out of Russia a smaller budget deficit (to around 5% in 1998 and 1999) and a new tax code (higher VAT, lower income tax and absolutely no exemptions).

Because economic growth has stalled -- again -- Rostelecom's outlook for 1998 has soured. Renaissance analyst Yuri Krapivin cut his 1998 revenue forecast to $1.55 billion from $1.85 billion because of lower growth and higher costs.

A look at 1997 results (according to international accounting standards) shows why: Net profit totaled $66 million on revenues of $1.6 billion, versus $58 million on revenues of $2.032. The devastating drop came from lower tariffs and a massive deferred tax payment keyed off of accounting changes.

But Rostelecom may yet manage to pull a rabbit out of its hat. Rumors in the market point to a formal acquisition of

Moscow International Telephone

, or MMT, through which most international calls are routed. The merger with MMT will save Rostelecom money on billing and switching, and a clever deal would allow Rostelecom to get a controlling stake in MMT with a stock swap, says Dmitry Sedov, telecom analyst for

CA-IB

, the merged

Creditanstalt

and

Bank of Austria

investment bank.

"I'm not terribly bullish about Rostelecom, but I'm comfortable recommending them for another three to five years at least, before revenues could deteriorate from potential competitors," Sedov says.

Renaissance's Krapivin isn't so sure. He's downgraded the stock to a long-term buy given that Rostelecom has only "minor financial growth" in the medium term. Well, those words aren't really a comfort, are they?