Top-100 most capitalized issuers in September

Total capitalization of Russia's 100 largest issuers amounted to $488bn at the end of September, having advanced 20 percent over the previous month. The number of companies with a capitalization of more than $1bn increased from 49 in August to 56 in late September. The RTS index grew 14 percent to 1007.76 points last month (max - 1008,56 points). The Russian main stock index marked its 10th anniversary noticeably, having reached four-digit numbers, which seems sublime to many market players, and baffling the long-term forecasts of stock market analysts.

Market growth was mainly supported by excess liquidity, which can be evidenced by record high trade volumes in September. For example, trade volume on the RTS classic market totaled $99m on September 2 (for shares included in the index). A series of hurricanes, which hit the US eastern coast, forced many investment banks and international organization to revise upward their medium-term oil price forecasts. This contributed to growth in demand for shares of Russian oil companies on the part of large foreign investment funds, and the oil sector pulled up the whole market. Such domestic news as Gazprom's (1st place) acquisition of Sibneft (6th place) and confirmation of the gas monopolist's upcoming share market liberalization also activated September purchases.

The top five most expensive issuers increased their capitalization by 25.48 percent to $252bn last month. At the same time, these companies hit record-high levels. Gazprom, whose capitalization surged 38.85 percent to $123bn, came out on top.

Unexpected demand for shares in the most long-suffering company of the past two years was reported in September. YUKOS (24th place) is one of the leaders in terms progress (10 places up) and is second to none in terms of capitalization growth (plus 93 percent, $3bn). Market participants attribute this advance to the possibility of Rosneft taking control over YUKOS. After Rosneft received YUKOS's main asset, Yuganskneftegaz, in December 2004, the latter brought several lawsuits, totaling approximately $11bn, against its former parent company. At the end of September, it was reported that the Cyprus-based company Hulley Enterprises, owner of 49 percent in YUKOS, might be named as defendant in one of the cases worth $8bn. If Yuganskneftegaz and Rosneft win the case, they will get from Hulley Enterprises either money or YUKOS's shares.

Leaders of growth
No.	Issuer	Change in rating	Change in capitalization, %
1	Kostroma State District Power Station	+17	+63.25
2	YUKOS	+10	+93.09
3	Zhigulevsk Hydropower Station	+9	+48.98

The remaining two rating growth leaders are energy companies: Kostroma State District Power Station (67th place), which has climbed 17 places up having increased its capitalization 63.25 percent to $754m, and Zhigulevsk Hydropower Station (85th place), having gained 48.99 percent to $576m and going 9 places up in the rating. As electrical energy reforms are advancing, demand for shares in regional electrical energy companies, which have long been ignored by both speculators and strategic investors, is growing. Listing of the first wholesale energy generating company has proven the stable course of the industry's restructuring. Trade for shares in OGK-5 (32nd place, $1.9bn) began in September. Though this company is a rating newcomer, it has already climbed pretty high. OGK-5's free-float is currently small, that is why it is too early to speak about the new company's fair market assessment.

As for other newcomers, Pipe Metallurgical Company (27th place, $2.4bn), Russia's largest and the word's second largest pipe producer, is worth attention. It owns majority stakes in the authorized capital of Seversky (93rd place), Sinarsky (96th place) and Volzhsky (98th place) Pipe Plants. In summer 2005, Pipe Metallurgical Company became an open joint stock company, and in September trade for its shares began on the RTS exchange. According to the company, these measures have been taken in order to conduct an IPO on a western exchange by the end of this year.

Leaders of decline
No.	Issuer	Change in rating	Change in capitalization, %
1	Azot (Tolyatti)	-20	-14.29
2	Apatit (Kirovsk)	-20	-15.00
3	Novorossiysk Shipping Company	-18	-11.43

Two chemical enterprises, Apatit (92nd place) and Azot (84th place) are leading the decliners, having fallen 20 places each. Anton Startsev, an analyst with the OLMA investment firm, says these companies have a very low liquidity and free float affecting the interest of investors that have plenty of investment ideas in other market sectors.

An advance in stock indices of developing markets and narrowing of the spread between yields on sovereign bonds of developing countries and US treasury bonds proves investors have reassessed risks: funds are more willingly invested in assets earlier considered very risky. Startsev believes excess liquidity is supporting stock market growth. "However, almost no fundamental factors for further growth exist, and this hinders forecasting future market fluctuations," he commented. Denis Pryanichnikov, head of the analytical department with Open.RU Brokerage House, is more optimistic about the market's development saying that if September dynamics remain, 1,200 points on RTS index can be achieved and in case of correction, the index will hardy drop below 1,000 points.

Top-100 most capitalized issuers in September
No. at the end of September	Issuer	Capitalization at the end of September, $ mln	Capitalization at the end of August, $ mln	Change in capitalization, %	No. at the end of August	Change in the rating	Company's share of Top 100, %
1	Gazprom	123 813	89 171	38.85	1	0	25.36
2	LUKoil	49 066	41 329	18.72	2	0	10.05
3	Surgutneftegas	38 367	34 168	12.29	3	0	7.86
4	TNK	22 754	19 393	17.33	4	0	4.66
5	Sberbank	18 261	16 980	7.54	5	0	3.74
6	Sibneft	17 084	16 610	2.86	6	0	3.50
7	Norilsk Nickel	16 963	15 280	11.02	7	0	3.47
8	RAO UES	15 886	13 616	16.67	9	1	3.25
9	MTS	15 842	14 839	6.76	8	-1	3.24
10	AFK Sistema	11 966	9 650	24.00	11	1	2.45
11	Sidanko	9 936	9 878	0.59	10	-1	2.04
12	VimpelCom	9 276	8 524	8.82	12	0	1.90
13	Novolipetsk Iron and Steel Works	8 091	7 072	14.41	13	0	1.66
14	Novatek	7 138	6 595	8.24	14	0	1.46
15	Tatneft	6 957	5 400	28.84	15	0	1.42
16	Slavneft	5 467	4 041	35.29	18	2	1.12
17	Severstal	5 397	4 580	17.83	16	-1	1.11
18	Mechel Group	5 016	4 058	23.59	17	-1	1.03
19	Megionneftegaz	4 119	3 189	29.16	22	3	0.84
20	Baltika	3 490	3 628	-3.82	20	0	0.71
21	Lebedinsky Mining and Processing Plant	3 478	3 497	-0.53	21	0	0.71
22	Purneftegas	3 473	3 014	15.23	23	1	0.71
23	Orenburgneft	3 361	3 738	-10.07	19	-4	0.69
24	YUKOS	3 087	1 599	93.09	34	10	0.63
25	Mosenergo	3 063	2 311	32.55	24	-1	0.63
26	SUAL	2 574	1 964	31.09	26	0	0.53
27	Pipe Metallurgical Company	2 408	No data available	No data available	No data available	No data available	0.49
28	Nizhny Tagil Metal W	2 092	1 830	14.29	28	0	0.43
29	Mikhajlovsky GOK	2 010	2 033	-1.12	25	-4	0.41
30	VSMPO-AVISMA	1 982	1 804	9.90	29	-1	0.41
31	Uralkali	1 912	1 602	19.36	33	2	0.39
32	OGK-5	1 899	No data available	No data available	No data available	No data available	0.39
33	Rostelecom	1 847	1 641	12.51	31	-2	0.38
34	ONAKO	1 794	1 768	1.52	30	-4	0.37
35	Bashneft	1 794	1 532	17.11	35	0	0.37
36	Irkutskenergo	1 770	1 246	42.05	41	5	0.36
37	West Siberian Iron and Steel Works	1 751	1 847	-5.19	27	-10	0.36
38	Aeroflot	1 590	1 611	-1.29	32	-6	0.33
39	Bank of Moscow	1 586	1 485	6.78	38	-1	0.32
40	Seventh Continent	1 585	1 094	44.86	46	6	0.32
41	Promstroybank, St. Petersburg	1 513	1 225	23.49	42	1	0.31
42	Nizhnekamskneftekhim	1 442	1 531	-5.79	36	-6	0.30
43	Krasnoyarsk Hydropower Station	1 372	No data available	No data available	No data available	No data available	0.28
44	MGTS	1 297	1 300	-0.27	39	-5	0.27
45	Oskol Electrometallurgical Plant	1 280	1 280	0.00	40	-5	0.26
46	Uralsvyazinform	1 272	1 189	6.93	43	-3	0.26
47	Varyeganneftegaz	1 266	1 113	13.77	44	-3	0.26
48	Lebedyansky Experimental Cannery	1 183	1 001	18.19	49	1	0.24
49	Stoylensky GOK	1 152	982	17.34	50	1	0.24
50	Silvinit	1 111	1 096	1.43	45	-5	0.23
51	Sayano-Shushenskaya Hydroelectric Power Plant	1 079	830	30.09	54	3	0.22
52	Acron	1 069	1 028	4.00	48	-4	0.22
53	Udmurtneft	1 069	1 497	-28.64	37	-16	0.22
54	Kachkanarsky GOK Vanady	1 065	1 042	2.20	47	-7	0.22
55	Uralsib	1 064	727	46.28	60	5	0.22
56	VolgaTelecom	1 025	974	5.28	51	-5	0.21
57	Salavatnefteorgsintez	989	890	11.12	52	-5	0.20
58	NOVOIL	937	675	38.82	65	7	0.19
59	Vyksunsky Metal Works	932	847	10.00	53	-6	0.19
60	Ufa Refinery	910	714	27.48	62	2	0.19
61	Karelsky Okatysh	885	773	14.54	56	-5	0.18
62	Nevinnomyssk Azot	842	636	32.43	70	8	0.17
63	Sibirtelecom	835	749	11.48	58	-5	0.17
64	Kazanorgsintez	802	750	6.90	57	-7	0.16
65	Ufaneftekhim	771	697	10.67	63	-2	0.16
66	Nizhegorodnefteorgsintez	751	No data available	No data available	No data available	No data available	0.15
67	Kostroma State District Power Station	751	460	63.25	84	17	0.15
68	Wimm-Bill-Dann	736	730	0.83	59	-9	0.15
69	Chelyabinsk Metal Works	730	727	0.43	61	-8	0.15
70	Lenenergo	728	575	26.76	77	7	0.15
71	GAZ	722	No data available	No data available	No data available	No data available	0.15
72	Yarpivo	706	661	6.74	67	-5	0.14
73	Novorossiysk Shipping Company	699	789	-11.43	55	-18	0.14
74	North West Telecom	691	644	7.36	69	-5	0.14
75	AvtoVAZ	677	659	2.76	68	-7	0.14
76	DSK No.1	672	672	0.00	66	-10	0.14
77	Sakhalinmorneftegaz	669	580	15.29	75	-2	0.14
78	RITEK	669	536	24.63	79	1	0.14
79	CenterTelecom	653	630	3.68	71	-8	0.13
80	RBC	635	600	5.80	73	-7	0.13
81	Volzhskaya Hydropower Station	602	426	41.23	89	8	0.12
82	Bashkirenergo	594	412	44.30	91	9	0.12
83	Irkut	588	577	1.87	76	-7	0.12
84	Azot (Tolyatti)	583	680	-14.29	64	-20	0.12
85	Zhigulevsk Hydropower Station	576	387	48.99	94	9	0.12
86	FESCO	572	596	-4.00	74	-12	0.12
87	KAMAZ	570	468	21.73	83	-4	0.12
88	Severstal-Avto	568	490	15.97	82	-6	0.12
89	Yaroslavnefteorgsintez	562	438	28.19	85	-4	0.12
90	Novomoskovsk Joint Stock Company Azot	554	429	29.19	87	-3	0.11
91	Altai-koks	534	371	44.00	99	8	0.11
92	Apatit (Kirovsk)	530	624	-15.00	72	-20	0.11
93	Seversky Pipe Plant	529	No data available	No data available	No data available	No data available	0.11
94	Ufa MPO (engine production enterprise)	500	495	1.08	81	-13	0.10
95	Chelyabinsk Tube Rolling Plant	491	513	-4.24	80	-15	0.10
96	Sinarsky Pipe Plant	472	428	10.29	88	-8	0.10
97	Power Machines	458	No data available	No data available	No data available	No data available	0.09
98	Tagmet	458	No data available	No data available	No data available	No data available	0.09
99	Konakovo State District Power Station	454	No data available	No data available	No data available	No data available	0.09
100	Kuzbassenergo	447	429	4.13	86	-14	0.09
Total		488 239	406 839	20.01
Total top5		252 261	201 041	25.48