23rd May, 2005

The Russian stock market exhibited faint signs of growth on lackluster volumes Monday. Trading dynamics got a boost from Western markets. However, the overall lack of transactions points clearly to the fact that foreign investors have opted for the sidelines until the Khodorkovsky trial pans out. The internal news flow was moderately upbeat. The highlight of the day was details which show that the state’s plan to consolidate a controlling stake in Gazprom are on track.

Newswires reported that FGUP Tekhnopromexport, a shareholder of Rosneftegaz, approved an additional issue valued at Rub 734 mln (about $26 mln) on May 20. A total of 18.4 bln shares will be issued with par value of Rub 10, according to the issue prospectus of Tekhnopromexport. The issue is to be placed by closed subscription in favor of the Federal Property Fund, which will then contribute 100% of Rosneft’s equity to the chart of Rosneftegaz, a special-purpose investment vehicle to be used to purchase the 10.7% stake in Gazprom that will give the state a majority holding in the gas giant.

The only blue chips that saw any action yesterday were Tatneft, Sberbank and bellwether UES, which ended flat compared to the previous close and Rostelecom (+0.5%). The RTS index pulled back 0.04% to 646.22 on more soft volumes amounting to just $2.2 mln.

MICEX trading was a bit brisker, with most blue chips ending up within a band ranging from +0.08% (Sberbank) to +0.9% (Mosenergo). The decliners included Tatneft (-1.97%) and Sibneft (-0.1%). The MICEX index advanced 0.24% to 587 on trading volumes which totaled $427.54 mln.

Meanwhile, Gazprom eased a little on SPICEX Monday, closing down 0.4% to Rub 80.2 with 9 mln shares changing hands.

Finam
Russian Brokerage Company
http://www.fin-rus.com