Russian Stocks Tumble as Oil Prices Fall
Securities of oil and gas companies closed considerably lower on the Russian market yesterday. Trading ended with a fall in exchange indices despite the upward trend of other issuers. The RTS index closed 0.44 percent down, to 1,647.54 points. The MICEX index fell 1.4 percent and the Kommersant index declined 2 percent.
The ongoing drop in oil prices following the Middle East truce has a most heavy impact on the Russian market. The Brent crude fell 2 percent, to $71.2 per barrel yesterday. Urals shrank to $66 per barrel, losing 9.3 percent in a persistent decline in the last six days to reach June’s level. Negative news on the natural resources market took its toll on stocks of Russian oil companies which went down some 2 or 3 percent. However, it was not only oil that swayed quotations. Veronika Shabanova, a trader at Urabsib, said sales of LUKOL had been going for a few days, and they could be connected with a change in the structure of the MSCI index. “Gazprom’s share in it will be increased to 40 percent while LUKOIL’s share will go down. Index funds are cutting on stocks of one issuer and boosting the stake of the other.” This fact, however, did not save Gazprom’s stocks from falling 1.4 percent yesterday.
Some less liquid securities, on the contrary, showed steady growth. Sberbank climbed 3 percent on the RTS exchange. Lebedyansky was up 3 percent as well and Razulyay grew 5.9 percent, showing that investors reviewed their portfolios in favor of the securities which are less dependent on current developments.
However, the Tatneft oil company became the top gainer with 6.7 percent yesterday. “A lot of banks are considering a rise on the company after mining operations tax was reduced. Tatneft’s production is costly, so the tax news makes it more lucrative,” Mikhail Zak, head of Veles Capital’s analytical department, said.
www.kommersant.com
All the Article in Russian as of Aug. 18, 2006
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