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12 May, 2008 17:11

Energy giants likely to gain from cabinet reshuffle

The Russian stock market continued to rally on Monday, spurred on by the cabinet reshuffle. The markets boomed last week after President Dmitry Medvedev’s inauguration and Vladimir Putin’s appointment as Prime Minister. What really fired up the market, th

While the rest of the world’s exchanges closed lower last week, the RTS gained over seven per cent, bringing the index to within three per cent of December’s record high.

Oil and gas stocks are expected to continue to thrive on the back of the decision to cut taxes, but that might mean other sectors have to take up the slack.

Goldman Sachs raised its 12-month estimate for the RTS by 12 per cent to 2750 on Monday, recommending energy blue chips.

Other financial institutions, including the investment bank Troika Dialog, expect the Russian market to grow by up to 30 per cent this year. In the shorter term, though, they expect some corrections.

“We may see some technical corrections during this week, but in general, I think the bullish mood will continue, especially bearing in mind the continuing rise of oil prices,” said Evgeny Gavrilenkov, Chief Economist at Troika Dialog.