MOSCOW. May 23 (Interfax) - A bandwagon of institutional investors is causing the Russian stock market to slide, like a number of other emerging markets, Oleg Vyugin, head of the Federal Financial Markets Service, said at a conference on the Russian debt market.

"There are no fundamental reasons for the slide - what we're seeing is institutional investors jumping on a bandwagon," Vyugin said.

There was a period when investors were keen to pump money into emerging markets, Vyugin said. "Now it turns out they've decided it's time to shorten their positions," he said.

This is not just happening in Russia, but on many emerging markets, and on some developed ones, he said.

But there are no fundamental reasons for a far-reaching correction, Vyugin said. "There are concerns about high inflation in the United States, but concerns built on one foundation only have frequently arisen in the past," Vyugin said.

On the face of it looks like insider abuse is pulling the market down, although there is no evidence of this, Vyugin said. The Russian market has much in common with other emerging markets right now, because global funds are offloading stocks, he said.

The Russian market is not a volatile bubble. "In the past, Russia has come close to becoming a volatile bubble market, but it can not be regarded as one with sustained growth," Vyugin said.

The Russian market may have looked a little overpriced in terms of earnings to capitalization in the past, but this is not the case now, Vyugin said. Russian companies are increasing their profits from quarter to quarter, creating additional potential for growth, he said.

Vyugin told reporters that the stock market slide should not affect the prospects for IPOs in Russia. An IPO is something different from secondary trading and the value of a company is usually determined by fundamental factors, he said.

"Why should a Russian retailer, say, be worth less than half a year back," Vyugin said.

He also suggested that because investors were quitting the market in droves it meant they must have a lot of spare cash, which they would be looking to =invest. "And they'll be looking where they used to look," in other words in Russia, he said.

Alexei Savatyugin, the Finance Ministry's official in charge of financial policy, said he did not think the market's slide was connected with inside information. If that is the case, the recent growth could also have been driven by inside information.

But the Russian market has "always been vulnerable to inside information," Savatyugin said. But if in the past such transactions could be detected, "now there are no obvious cases," he said.

Savatyugin also said he thought investors would put their money into more reliable assets like bonds while the stock market is falling. But he said he was concerned that the money would be shifted "not to the bond market but to real estate."

The real estate market, he said, was purely speculative right now, and it would be better if investors were to switch to the debt market.