Bloomberg News

Gazprom to Beat Sberbank as Consumers Hoard Gas, UralSib Says

July 01, 2009

OAO Gazprom, Russia’s biggest publicly traded company, will probably rise more than other stocks in the second half of the year as funds buy more shares in line with benchmarks and European consumers accumulate natural gas before winter, UralSib Financial Corp. said.

The average Russia portfolio is only 24 percent invested in Gazprom even though the world’s biggest natural-gas producer has a 32 percent weighting in the benchmark MSCI Russia Index, UralSib said in a report today, citing its estimates and data from Emerging Portfolio Fund Research. Russia funds are 9.1 percent invested in OAO Sberbank, Russia’s biggest bank, even though the stock makes up only 7.7 percent of the index.

“Funds are going to have to rebuild their portfolios in Gazprom as they did with Sberbank in the first half of the year,” said Chris Weafer, chief strategist at UralSib, by telephone from London. “We’re going to see a switch from Sberbank into Gazprom.”

Gazprom may also benefit from European consumers who this year held off buying gas in hopes of lower energy prices yet still need to build up supplies before winter. Gazprom exported 59.5 billion cubic meters of gas in the first half of 2009, or three-fourths of its target, Deputy Chief Executive Officer Alexander Medvedev said June 24.

“They expect to recover most of those lost volumes late in the third quarter,” Weafer said.

Gazprom rose 6.3 percent to 165.95 rubles on the Micex Stock Exchange today, compared with a 4.2 percent gain for the Micex Index. (INDEXCF) This year, the Micex has risen 63 percent, while Gazprom is up 54 percent and Sberbank jumped 73 percent in ruble terms.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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