OREANDA-NEWS. March 29, 2010. Transneft denies the possibility of a public placement of its common shares, company press-secretary, Igor Dyomin said on March 26. The disclaimer had been forestalled by an announcement by Transneft president, Nikolai Tokarev, who said on March 24 that the company could upsize its charter capital in order to finance the construction of the Zapolyarnoe-Purpe oil pipeline, where investment stands at about USD 2 billion.

After Tokarev’s comment, Transneft stock valuations had advanced for three consecutive days, outperforming the market. In our opinion, the key driver behind the stock uprise was market expectations of Transneft’s possible IPO. After the information has been officially disclaimed, Transneft stock prices could correct down quite notably in the coming few days.

At the same time, regardless of what Mr. Dyomin said, the issue around the company’s IPO could be considered only at the government level, and not by company management. The federal budget is under pressure from the economic recession, and we do not rule out that, upon request from the Finance Ministry, the government could at least touch the issue of Transneft’s IPO.