Russian oil and gas companies are ceding their dominance on the domestic stock market, with their capitalization plunging below 50% of the value of all traded shares in January-March 2010, a business paper reported on Thursday.
The market capitalization of Russian oil and gas companies stood at 50.1% of the total worth of the domestic share market in 2009 compared with 57% in 2008, 50.4% in 2007 and 62.6% in 2006, Vedomosti reported, citing data of the National Association of Stock Market Participants.
In the first quarter of 2010, the share of oil and gas stocks on the domestic share market dropped to 46%, a MICEX representative told Vedomosti.
At the same time, the financial sector built up its market capitalization almost 50% to 14.5% in 2009 and the shares of the metals industry grew from 10% in 2008 to 12.3% last year.
The Russian stock market capitalization stands at $886 billion. Russian energy giant Gazprom and state-controlled oil company Rosneft still have the largest shares on the market ($123 billion and $72 billion, respectively). However, retail savings bank Sberbank has made a major advance to take up the third place with $57 billion, Andrei Kuznetsov, an analyst with Troika Dialog brokerage, told Vedomosti.
During the domestic stock market crash in late 2008 and early 2009, investors largely sold out the shares of banks and companies with revenues in rubles while oil and gas companies selling energy products for hard currency lost less, Natalia Orlova, chief analyst with Alfa-Bank, said.
However, as the market started to recover, investors preferred investing in financials rather than returning to oil and gas stocks. Investors have changed their preference in favor of financials due to the specifics of taxation in the oil and gas sector, Denis Sarantsev, managing director of Aton brokerage, told Vedomosti.
Despite the growth in energy prices, benefits are reaped by the state through the taxation system. "We witnessed this situation in 2008, for example, when the oil price of $140 per barrel had no effect on the growth of the oil industry market capitalization," he said.
Another reason for the diminishing share of oil and gas companies is that no large public placements have been made in the sector lately while companies from other industries have been active with their share offerings, Sergei Golovanyov, department director of the RTS stock exchange, told the paper.
MOSCOW, May 20 (RIA Novosti)
