Most deals were made by Russian companies, and foreign buyers made up 14 percent. Rising profits and increasing transparency of Russian companies were key growth factors, analysts say. Companies of the fuel and energy sector maintain the lead, but there is some progress in other areas as well.

The merger of Russia’s leading mechanical engineering companies, United Heavy Machinery (OMZ) and Silovye Mashiny (Power Machines), in December 2003 was an important event for the Russian economy and the stock market.

Russian companies began to buy more foreign stock. This mainly affected the metal industry, which is the most dynamically developing industry at the moment. In December 2003, Severstal won an auction to buy the assets of Rouge Industries, the fifth largest producer of steel in the United States. Severstal paid $285m for the deal.

There were also important deals in the telecommunications sector. Alfa Eco, having a blocking stake in VimpelCom (Russia’s second largest mobile phone operator), acquired the assets of the company LV Finance, including a 25.1 percent stake in Megafon. The price of the deal was not revealed, but experts estimate the blocking stake in Megafon at $295m.

Another telecommunications company, Golden Telecom, completed the acquisition of the company Comincom and its subsidiary Combellga from Nye Telenor East Invest AS (Telenor) in December 2003.