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Petroleum industry

Gazprom Shares Rally Amid Western Demand and Liberalization Hopes

Strategic Insights

— 1 min read

Gazprom shares surged on Wednesday, with prices rising over 5% to above 140 rubles per share, driven by strong demand from Western investors. The rally came as some brokerages raised their target price for the company's American Depositary Shares (ADS) to over $60, anticipating the liberalization of the company's share market. Analysts point to the narrowing spread between ADS prices and internal market prices as a sign of growing investor interest.

Key Takeaways:

  • Gazprom shares rallied 8.1% to 141.4 rubles by 2.06 p.m. on Wednesday, driven by Western demand on the St. Petersburg Stock Exchange.
  • Some brokerages have raised their target price for Gazprom ADS to over $60, which translates to $6 per share for locally traded shares.
  • The liberalization of the company's share market is expected to be a major catalyst for growth, with analysts pointing to the narrowing spread between ADS prices and internal market prices.
  • Insider information is suspected to be behind the surge in demand, with a major buyer emerging in the Gazprom sector, possibly even the company's management.
  • The market is considered overheated, with a possible correction looming due to high oil prices and interest rate hikes by the Federal Reserve.

Statistics:

  • Gazprom shares rose 8.1% to 141.4 rubles by 2.06 p.m. on Wednesday.
  • 58 million shares of Gazprom changed hands by 3.00 p.m. on Wednesday.
  • The RTS index fell 0.14% to 943.64, while the MICEX index was off 0.35% to 833.6.
  • The composite S&P/RUX rose 2.23% to 1,221.29 in rubles and 2.41% in dollars to 256.24.

Sources:

  • September 21, Interfax, "Correction slows, Gazprom remains among leaders"
  • Prospect Management Company's asset manager Alexander Baranov, Interfax, September 21.
  • MDM Bank's senior equities trader Anatoly Tsoir, Interfax, September 21.
  • Uralsib client sales manager Kirill Kleiner, Interfax, September 21.
  • Bank of Moscow analysts, Interfax, September 21.
  • Aton-Line trader Alan Dzarasov, Interfax, September 21.

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