The business television channel breaks onto the Moscow market.

St. Petersburg. RosBusinessConsulting (RBC) shares were among the top gainers on the Russian market yesterday.

By 5:15 p.m. Moscow time, the stock price had shot up 8.17 percent since the previous day's close, to RUR266.2 (approx. USD9.94 at the current exchange rate). The rise has been triggered by a statement released a day earlier, revealing that the company has reached an agreement with Moscow's cable network operator Mostelecom, under which the RBC television channel would gain access to its Moscow viewers. Mostelecom has one of the world's largest citywide networks, offering its services to three million Moscow residents. Therefore, this cooperation will help RBC, whose broadcasting has up to that point been available only through paid service networks, to boost its audience considerably.

"We assess positively RBC's agreement with Mostelecom, which will remove the main obstacle preventing the RBC TV channel's development in Moscow. RBC will now be able to considerably increase its proceeds from gaining access to the most appreciative Moscow TV audience," Uralsib analyst Konstantin Chernyshev commented. "RBC's television broadcasting arm, RBC TV, was established in 2003, posting $24m in sales revenue in 2005."

"The company has an audience of 43m people in Russia and 15m people across the CIS and the Baltic states. However, it was not until recently that RBC has forged a deal with Mostelecom, the owner of a television network that has access to the bulk of Moscow households, and thus RBC TV's presence was rather limited in Moscow. According to our estimates, RBC's proceeds from sales of TV services will be up 39 percent to $34m in 2006," the analyst added.

Lack of data. Nevertheless, experts are not in a rush to revise their fundamental ratings of RBC stocks. After yesterday's jump, the company's share price exceeded most of its fair value levels set by analysts. However, there is not enough information about the deal at this point to count it into calculation models. "There is no information on the details of the deal: we do not know about the client base, to which the company has gained access, or the financial side of the transaction, because RBC and Mostelecom have also signed a confidentiality agreement," Troika Dialogue analyst Yevgeny Golossnoy said.

"Earlier, RBC stated that to launch broadcasting in Moscow might cost the company between $2m and over $40m. Hence, either RBC has inked a very advantageous deal, or has paid a very high price for the possibility of gaining access to the majority of the Russian capital's TV viewers, or else it may hay have entered into an alliance with Mostelecom. It is not likely that RBC has managed to economize on the deal, because Mostelecom is controlled by Suleyman Kerimov, who knows the price of entering the Moscow market too well to miss out on it," Golossnoy argued.

He offered one of the most pessimistic estimates for RBC shares, USD6.7 (RUR179.33 at the current exchange rate). Alfa-Bank gave a more positive assessment for the company, putting its fair value at USD7.8 (RUR208.78) per share. According to Konstantin Chernyshev's estimates, RBC should cost USD9.3 (RUR248.9) per share.