ConocoPhillips acquired 7.59% LUKoil stock at $1,988 million in today's central market event. The purchase was a litmus paper to show that investment in Russian assets was worthwhile.
LUKoil came down, somewhat, after the auction returns were made public. Experts regard it as mere technical correction after its stock was skyrocketing day in, day out preceding the auction-suffice it to say that the Russian Trading System owed to the company more than a half of its September turnover.
LUKoil finished the day at about 900 rubles a share, roughly $30. Experts think it will eventually leap over a thousand ruble mark, what with expectations of quicker progress and more efficiency now that ConocoPhillips is among its holders.
LUKoil has left the foreground, for the time being, and Mosenergo stock deals are suspended until further notice. Norilsk Nickel has filled in the gap to lead the show. "The situation clearly shows big bids by portfolio investors in search for previously underrated market assets. Norilsk Nickel was lagging behind the market within preceding days, so dealers sat up and took notice," comments Alexander Sobolenko, in charge of Bittsa Invest Co. stock transactions.
Bids for the more obscure stock skyrocketed alongside blue chips toward the day's end. Analysts see it as a new wave of market rise.
"The Russian stock market has gained a new lease of life, to all appearances, as ambitious LUKoil-ConocoPhillips partnership demonstrates Russian assets as lucrative investment," says Maxim Shein, BrokerCreditService chief analyst.
MDM Bank experts regard ConocoPhillips move as "an essential vote of confidence in LUKoil and entire Russia. One of the largest transnationals is willing to invest billions of dollars in this country to show its firm belief in Russia's fine economic prospects and beneficial business climate."
The day finished with Russia's entire liquid stock bullish, with token exceptions. Despite all that, experts are not regarding the developments through rosy specs.
The Yukos controversy offers the greatest market hazard, says Sergei Kosynkin, Zerich Capital Management chief trader. "The government has made short work of one emitter, LUKoil. Now's the turn of another," he warns.
Alexander Sobolenko is no less wary. "The government has sold off its LUKoil block, so the market expects authorities to put an end to the Yukos affair now," he says.
The RTS index came 0.39% up during the day to 631.58, with 227 transactions to a lump $31 million to exceed yesterday threefold, with 129 deals to a total $12.3 million. Norilsk Nickel led the day to come 3.75% up by closing time yesterday. Yukos came 0.97% down. The other blue chips were moderately up, from Sibneft's 0.15% to 2.29% for Tatneft.
