Leading Russian index set to free float EMERGING MARKETS:
ByLine: By ALEX SKORECKI
The composition of Russia's leading stock market index RTS1 will change
radically from July 1 when it switches to using the free float system.
Under the system, only shares available to be traded are taken into account.
The biggest effect will be on Lukoil, Russia's biggest oil producer,
which will account for 30 per cent of the index, up from 15.9 per cent. The
weighting of Yukos, the number two oil producer, will fall from 14.3 per cent
to 8.9 per cent.
Other fallers include the third-biggest oil group, Sibneft, down from 8.4 per
cent to 2.6 per cent, and power utility UES, down from 7.6 per cent to 3.3
per cent.
Adjustments are planned on a quarterly basis "based on expert
estimations".
The fall in the Yukos weighting will remove some of the recent volatility in
the index. Yukos's shares have been buffeted by its uncertain future,
including a demand last month by the government to pay Dollars 3.5bn in back
taxes, which threatens to bankrupt the company.
The RTS1 has been falling in spite of the recent oil price surge. It peaked
in April at 755, having doubled over the previous 12 months. Yesterday it
closed up 1.6 per cent at 576.27.
Gazprom is Russia's biggest company but its shares are not available to
foreign investors, who can only buy its American Depositary Receipts.
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