RUSSIAN BUSINESSES DOMINATE LIST OF 100 LARGEST EASTERN EUROPE COMPANIES

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MOSCOW, May 27 (Arseny Oganesyan, RIA Novosti analyst) - In this year's list of the 100 largest Eastern European companies published in Vedomosti, a popular Russian business newspaper that is published jointly with Financial Times and The Wall Street Journal, nearly half were Russian. According to stock market investors, Russian business is also pleased with the long-awaited diversification of the economy that has started.

Forty-five Russian companies, ten more than last year, were on the list. According to Vedomosti, Russia achieved these results because of a phenomenal streak on the stock market. This year (until March 25 when the data were compiled for the list), the index of the Russian Trading System (RTS) grew by 94%. Russia's leading natural gas company, Gazprom, which was second on the list last year, elbowed Yukos out of the top spot this year. The high prices of metals on the world market helped Norilsky Nickel, whose capitalization has more than tripled, to outstrip the Unified Energy Systems of Russia. Surgutneftegaz, LUKoil, MTS and Savings Bank retained their places in the top ten, the newspaper reported.

This year the list was more diversified. Until now, Russian business was represented by raw materials, energy and telecommunication companies. This year, however, Irkut, an aircraft cooperation, was on the list. The transportation sector of the Russian economy was represented by Aeroflot, which rose ten places to 44th, and the Far East Steamship Line (72nd place). The machine building sector was represented by Siloviye Mashiny, which was included into the list for the first time. The chemical industry was represented by Nizhnekamskneftekhim (50th place) and Silvinit (89th place), which was also included on the list for the first time.

The chemical and mining industries (Mechel and the Nizhny Tagil Metallurgical Plant were included in the list for the first time), whose activity is mostly oriented on exports, have gained considerably from the increase of the price of their products abroad. The first appearance of Uralsvyazinform, a regional telecommunications operator that was ranked 39th, on the list was mostly because of the success of its mobile phone subsidiaries.

The package of laws, adopted last spring on reforming the energy industry, and the development of plans to restructure regional energy companies contributed to the growth of their capitalization. As a result, three new energy companies appeared on the list and the energy companies that had previously been on the list were ranked higher.

Food producers were not as lucky. Wimm-Bill-Dann dropped from 37th place to 53rd, however the company's stock has remained practically unchanged this year (+1, 4%). The Baltika brewing company, whose capitalization only grew by 17.5%, dropped eight places to 30th.

The newspaper Vedomosti reported that the capitalization of Eastern European companies considerably increased before some of the countries in the region joined the European Union on May 1. Since the Russian market also grew rapidly, the threshold for being included on the list nearly doubled - from $169.9 million last year to $315.1 million this year.

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