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December 28, 2004

Tuesday, December 28, 2004 09:32:55

Invest in Russia/Yukos at Your Peril

Putin the Would-Be Capitalist has managed to bring a few people into line in his time as President and Prime Minister, just like the old days when he headed up the KGB. Apparently it's his political friends and not his enemies (Khodorkovsky) who now run the number two Russian oil giant, OAO NK Yukos (RTS: YUKOG). The last figures available in 2002 showed 100,000 employees, US$11.4 billion in sales, which was a Y/Y increase of 17.4 percent, with US$3.1 billion net earnings (of which how much was parked offshore in Cyprus?). Having knocked the share price down in a few months from almost 150 to 20.85 (down 6.15 or 22.8 percent overnight!), maybe Putin's pals will now help him rebuild his pro-market image he so cleverly created. While I'd like to see success there, somehow I think foreign investors will think ‘peril' before ‘profit'.

Posted by Posted by Bill Cara on December 28, 2004 09:32:03 AM | Category: Cara Today in the Market