OREANDA-NEWS. July 27, 2010. The Russian government plans to privatize stakes in 10 large companies in the next three years in order to boost budget revenues by planned RUB883.5bn (RUB298bn in 2011, RUB276.1bn in 2012 and RUB309.4bn in 2013). according to Vedomosti. Among others, the proposal includes stakes in state-controlled Rosneft, Transneft, Sberbank, VTB and Russian Rail (RZD), reported the press-centre of OTKRITIE Financial Corporation.

View: We believe the news is likely to be positively received by the market, as the potential reduction in government-controlled interests should increase free floats and improve liquidity of those stocks already present in the secondary market. Additionally, the measure will enable to address the budget deficit issue without raising new debt.

We believe the wide privatization list implies that the Finance Ministrry attempts to be conservative in balancing the 2011-2013 budgets, as well as in its attempts to reduce the fiscal deficit to 2% GDP by 2013. This is a fallback, especially as the oil price assumed in the budget is USD75-79/bbl. This list still has to be approved by the whole government for the inclusion in the budget plan.