Ratings

/20 February 2007 /

/WPS Russian Media Monitoring Agency/

"We are pleased with the S&P's decision and hope that it will have a positive effect on the IPO of our bank," said Bella Zlatkis, Deputy Board Chairman of Sberbank.

S&P explained the decision not by a coming IPO, but by the liberalization of the regulations in January. The law approved last year provided foreign and Russian investors with equal terms of buying shares of Russian banks (now, when buying up to 20% of bank shares, they will not have to obtain an authorization from the Central Bank of Russia). "We thought earlier that foreigners were barred from taking part in Sberbank's capital. In fact, only 8% of its shares were made available to foreign investors," said Taber Johnson, the director of index services of S&P. Now "all special legal and practical restrictions on the participation of foreign capital in Russian banks may be considered lifted," S&P analysts said.

Analysts explain the revision of Sberbank's share in the index first of all by a coming SPO of Sberbank. "The bank's capitalization will increase after the SPO and it must be taken into consideration," says Dmitri Ugolkov, the director of analytical department at CenterInvest Group. "I think the increase of Sberbank's share in S&P's index and the bank's SPO are interrelated. S&P's decision proves that Sberbank's shares are liquid and it will have effect on its offering," says Julia Arkhipova, Rus-Rating analyst.

Now foreign investors will increase the amount of bids for Sberbank's shares. "An increase of the share of a company in the index always favours the demand for shares of this company," Dmitri Ugolkov says. "International funds which simulate S&P's index may raise the demand for Sberbank's shares by 3-5%." "As a result of a higher demand for shares, Sberbank's SPO will be carried out at a premium of up to 4%," says Konstantin Solabuto, an investment adviser at Finam.

On February 16, indexes of the RTS and the MICEX increased 0.11% and 0.2%, respectively. Despite positive news about Sberbank, the bank's shares fell. "By the closing of the exchange, Sberbank was the only company which shares went down. They fell 1.59% on the MICEX," said Alexander Pimenov, a finance adviser at BrokerCreditService. "Large investors anticipated a revision of Sberbank's share in rating indexes. We take it as technically positive news," Alex Kantarovich at MDM-Bank explained the market behaviour.

Most analysts hold the opinion that it will have no effect on Sberbank's share quotations. "At present, most foreign and Russian investors are guided by the MSCI Index," says Ekaterina Degtyareva, Absolut Bank analyst. However, according to her, investors responded to the recent statement to double Sberbank's share in the MSCI Index not so actively as analysts had expected.

"The autumn rally of Sberbank may be explained by the fact that market participants considered an increase in Sberbank's share in rating indexes probable," says Alex Kantarovich at MDM-Bank. The Managing Director of Management Company Alfa-Capital Valery Petrov says the principle of "buying on rumors and selling on facts" is quite to the point in this case. By the closing of the exchange on February 16, Sberbank's common shares went down in price 1.6% on the MICEX and 1.8% on the classic market of the RTS.

Taber Johnson objects that it is difficult to analyze the RTS market or the MICEX. However, there is an experiment. "When VympelCom shares were added to the S&P Index, ADR traded on the NYSE rose in price 10% and the trading volume increased 1.5 times in the absence of other news," he says.

The head of corporate department of a rating agency Expert RA Stepan Zhulin considers S&P's actions as "an awkward attempt to sell rating services to Sberbank which currently prefers the services of Moody's Investors Service and Fitch Ratings."