World's Biggest Emerging Market: Russia

Russian stocks are approaching $1 trillion in value, an emerging-market record, mostly because of the country's oil and gas industry. The Russian Trading System Index [RTSI] has surged 88 percent over the past 12 months. Russia's market capitalization on Aug. 16 reached a record $946.2 billion, 15 percent larger than South Korea, the next biggest emerging market, at its peak in May, according to data compiled by Bloomberg.

click to enlarge

Russia´s biggest company, OAO Gazprom (not listed in the U.S.), ranks as the world's third-largest company at $276.9 billion in Marketcap, behind Exxon Mobil (XOM). and General Electric (GE) and ahead of Microsoft (MSFT) and Citigroup (C). Shares of Moscow-based Gazprom, the world's largest natural-gas producer, have jumped 60 percent this year. The country's biggest companies outside the oil and gas industry include OAO Sberbank, Russia's biggest lender; OAO Unified Energy System, the national power utility; OAO GMK Norilsk Nickel, the world's largest nickel miner; OAO Cherkizovo Group, Russia's largest meat producer; and OAO Mobile TeleSystems, eastern Europe's No. 1 mobile-phone operator.

Unfortunately, there are only some Russian companies listed on U.S. exchanges:

Mechel Steel Group (MTL)
Mobile Telesystems (MBT)
Rostelecom (ROS)
Tatneft (TNT)
Vimpel Communications (VIP)
Wimm-Bill-Dann Foods (WBD)

Additionally, there are some companies traded on the London Stock Exchange [LSE]:

Amtel - Vredestein (LSE: AMV)
Comstar United Telesystem (LSE: CMST)
Evraz Group (LSE: EVR)
Lukoil (LSE: LKOD)
Novatek (LSE: NVKT)
Rosneft (LSE: ROSN)

However, a lot of Russian ADRs are traded OTC in the U.S. such as Lukoil (LUKOY.PK). The Bank of New York provides a detailed list.

Comments

[Jonathan Liss:]

Still, with Putin calling the shots and after what he did to Yukos, I wouldn't feel all that safe investing in a Russian economy, where cronyism and questionable business practice are the rule.

2006 Aug 31 03:22 AM