A raft of analysts forecast the soon growth on Russia’s market, advising to buy Gazprom, which is quoted around $11.7 now.
Photo: Alexander Miridonov
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The Heavier the Weight, the Lesser the Risks
Standard&Poor’s upgraded to BBB+ the credit rating of Russia for foreign currency liabilities yesterday. If happened a bit earlier, the improvement would have set the market abuzz with excitement fueling the flow of funds to stock exchanges of Russia and triggering the surge in quotes.
Still, the market didn’t respond yesterday. Moreover, it failed to be moved even by the greater share of Gazprom in MSCI Emerging Markets, which widened from 2.66 percent to 5.19 percent September 1. The weight of Russia’s companies in MSCI EM grew together with Gazprom. Russia stepped up from 5.3 percent in January (eighth score) to 11.4 percent (third score after Korea and Taiwan).
The capital inflow in Russia may fetch $15 billion as a result, according to Renaissance Capital. Quite a few analysts predict the soon surge on our market and advise to buy Gazprom, which is quoted at around $11.7 now. The gas monopoly may soar to $13.4, they say.
The stock market of Russia will face the capital inflow, says Yevgeny Gavrilenkov, who is the chief economist at Troika Dialog, adding it will hardly happen once the MSCI indices are finally rebalanced. The reasons are more fundamental. Global investors are forecasted to revise their views on the risky nature of emerging markets (including Russia), where the stock market-to-GDP ratio has nearly doubled in the last seven to eight years, the exports and gold and foreign currency reserves are stepping up and the state budgets benefit from surplus.
www.kommersant.com
All the Article in Russian as of Sep. 05, 2006
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