Rosneft Becomes Most Valuable Russian Company

The capitalization of Rosneft on the Moscow Stock Exchange rose by 2.04% to 4.534 billion rubles ($68.46 billion) this week, with the Russian oil giant surpassing Sberbank as the most valuable Russian company by capitalization, reported.

Sberbank’s worth fell to 4.532 trillion rubles, taking into account preferred shares. The bank was the most valuable Russian company since 2016, and at its peak in February 2018, its capitalization exceeded 6 trillion rubles ($90.6 billion). However, later, due to sanctions against Russia, the shares of the state bank lost value.

Rosneft published strong reports on the eve of the second quarter of 2018, EBITDA increased by 46% compared to the first quarter to 565 billion rubles, while net profit jumped 2.6 times to 256 billion rubles. This is the a record net profit in the company’s history.

The growth of quotations was also influenced by the announcement of the management about a $2 billion share buyback, as well as the statement of the chief executive director of Rosneft Igor Sechin on the completion of the main strategic purchases.

Since early 2018, Rosneft shares have risen in price by 46.7%, while Sberbank’s has fallen by 10%. The state-owned Bank will remain under pressure due to the possibility of new sanctions against the state debt and the banking sector, trading analyst Elbek Dalimov told Vedomosti. It did not help even that the bank’s profit permanently grows: in July, Sberbank earned 71.4 billion rubles. net profit, whereas in June – 69 billion rubles., and in May – 67 billion rubles.

U.S. senators are preparing a bill on new sanctions against Russia, which includes a ban on operations in the U.S. and the freezing of assets of seven Russian banks, including Sberbank, VTB and VEB. These banks will not be able to conduct standard dollar settlements through correspondent accounts in U.S. banks – the greatest fear of Russian businesses.