50 Most Capitalized Russian Corporations
As of August 31, the capitalization of 100 Russian companies gained 5 percent to about $10.4bn in comparison to July. At the same time, growth in the top ten companies of the rating amounted to less than 4 percent despite the fact that even YUKOS' capitalization advanced.
Changes occurred in the top three places. LUKoil became second, having replaced Surgutneftegas. Market participants monitored the situation with selling a 7.59-percent stake in LUKoil over the whole of August. According to a document distributed by the Federal Agency for Managing Federal Property, the standard price for the state stake in the oil company was set at RUR36.8bn (about $1.26bn). This amount turned out to be at least 1.5 times lower than the market had expected. However, the situation changed in the middle of August. News appeared on the market that the American company ConocoPhillips, which was going to participate in the auction, was planning to increase its stake in LUKoil to a controlling stake in the future. The market reacted quickly - shares in the oil company started growing steadily, which allowed the company to occupy second place in the rating. The rest of the top ten remained in their places.
The capitalization of Gazprom dropped more than 2.5 percent in August. At the same time, these changes did not affect the position of the long-term leader, as its performance was almost twice that of LUKoil. Expectations for the prompt liberalization of Gazprom's shares were factored into their price long time ago. That is why a request made by a Duma deputy, which could have halted the process of liberalizing the trade system in the event the investigation had started, resulted in a fall in the company's shares. On August 18, Gazprom's securities plummeted more than 13 percent after Yury Savelyev, the Deputy Chairman of the Duma Committee for Production, Construction and High Technologies sent his requests to the Federal Security Service and the Interior Ministry to analyze the situation with illegal acquisitions of Gazprom's shares by foreigners. At the same time, an all-time record of $176m in deals with the company's securities was set on the RTS stock market that day. However, this sharp fall remained a one-day episode. The market calmed down because the government was not going to buy the company's securities and as such, it did not need to decrease the capitalization of Gazprom.
MTS, which was going up gradually every month, remained on fifth place in August. Rostelecom was in twentieth as in July. It is worth mentioning that announced information about an increase in the net income of MTS by 108 percent in the second quarter and in Rostelecom's net income by 37.8 percent in the first half of this year did not manage to raise the companies' rating positions. At the same time, the results of other representatives of the telecommunications industry were fairly positive. Five companies, namely VimpelCom, Uralsvyazinform, VolgaTelecom, CenterTelecom and Southern Telecommunications Company (UTK) occupied higher positions in the rating.
The volatility of YUKOS' shares remained high last month. Hardly did they increase when they dropped again. For example, this happened after information about the beginning of a scheduled tax inspection of the company's activities in 2002 by the Russian Tax Ministry, about freezing the company's assets in 20 regions and about a new freezing of Yuganskneftegaz.
Last year there were few isolated cases of suspending trade due to sharp changes in prices for the company's shares, whereas this summer their number surged. The way the situation developed led to the fact that on August 18, it was necessary to suspend YUKOS' trade twice. According to analysts, YUKOS' shares are the most liquid instruments of investing funds on the market at present. The intraday price range reaches more than 20 percent. However, it is possible to benefit from such fluctuations only if you know what decisions government officials will make. Taking into account all fluctuations, the price for shares in the oil company has changed by almost 1000 percent over the past year. Nevertheless, not all players are ready to take risks in the situation when the market became unpredictable. Large investors are waiting for the outcome of the YUKOS' case and that is why only speculators are active on the market.
The trend to target the sector of second-tier shares has appeared on the market. Such investments are usually made for a long term due to their low liquidity. In this connection, it is possible to assume that players are forecasting the restoration of upward dynamics in the foreseeable future. This is likely to happen in October after a state stake in LUKoil is sold at auction. So far, the absence of real changes in the issues of restructuring Gazprom and RAO UES and the expectation for an outcome of the YUKOS' case have not given such an opportunity to the market.
|№ in August||№ in July||Issuer||Capitalization, End of August 2004, $mln.||Capitalization, End of July 2004, $mln.||Change, %|
|17||16||NGK Slavneft||1949,24||2139,41|| |
|25||31||Zapsib (West Siberian Steel Corp,)||958,70||639,14||50|
|29||27||NTMK (Nizhnetagilsk Metallurgical Plant)||887,53||772,90||14,8|
|31||29||Mechel Steel Group||689,34||689,34||0|
|40||42||Sayano-Shushensk hydroelectric power plant||473,72||454,38||4,3|
|46||55||Mechel (Chelyabinsk metallurgical plant)||395,25||316,20||25|
|47||47||Krasnoyarsk hydroelectric power plant||395,02||395,02||0|
|49||45||Sayanogorsk Aluminium Plant||389,37||413,33||-5,8|