| International rating agency recognizes Russia as attractive, but not its largest corporations The international rating agency Moody's yesterday downgraded the outlook for the ratings of Yukos and Sibneft to "negative" - before that they were "stable" and "positive" respectively. More recently, even before the new “attack on Yukos,” Moody’s assigned Russia an investment rating, which caused a strong reaction from domestic and foreign investors. After the arrest of Mikhail Khodorkovsky and 42% of Yukos shares, as sources at Moody's said, it would not be entirely correct to downgrade the just assigned rating to the previous level, and the agency took revenge on the “guilty” issuers.
The changes, as stated in the agency’s press release, “are due to the uncertainty of the situation with the fate of Mikhail Khodorkovsky and his stake in YUKOS.” The Russian stock market fell shortly after these events. According to analysts, investors are now simply afraid to “enter” an unstable market for a long time.
Moody's yesterday followed the example of the rating agency Standard & Poor's, which at the end of last week changed its forecasts for the creditworthiness of Yukos and Sibneft and lowered the outlook for both companies to "negative". Moody's notes the unprecedented nature of the actions of law enforcement agencies, and therefore considers their impact on Yukos's financial creditors and Sibneft bondholders unpredictable. All this, according to agency experts, can make the process of raising funds problematic for YUKOS. But at the same time, Moody's analysts believe, Yukos does not lack funds due to high oil prices and has no problems servicing debts.
The Standard & Poor's rating agency responded to the actions of the Prosecutor General's Office at the end of last week, when a 44 percent stake in Yukos was seized. “On Friday, we placed YUKOS’s rating on the CreditWatch list with a negative outlook, and Sibneft’s with a developing outlook,” says S&P credit analyst Elena Anankina. - The reason for this was the arrest of YUKOS shares. Overall, the events surrounding Mikhail Khodorkovsky’s company go beyond normal country risk and raise particular concerns regarding the protection of property rights in Russia, given the opacity and unpredictability of the legal system and selective enforcement.” In the future, Standard & Poor's agency, she says, will closely monitor the development of the situation. “We will look to see whether the actions of law enforcement agencies will affect the liquidity of the company, the situation with licenses for key oil fields and control over the main subsidiaries, as well as how significant the influence of the security forces will be on the management and governance of the company,” says Ms. Anankina. “The creditworthiness of YUKOS is affected not by the arrest of Mr. Khodorkovsky itself, but by the possible negative consequences for the financial and operating activities of the company and its management system.”
Securities quotes on the domestic market continued to fall yesterday. Yukos shares fell in price on the RTS stock exchange by 5.18%, Sibneft by 2.48%. The RTS index fell by almost 2% and amounted to 540.65 points. On the MICEX, Yukos fell in price by 5.13%, Sibneft by 4.69%. The rest of the securities followed the falling oil market, with the only exception being Norilsk Nickel, which grew by 2-4% due to high world prices for nickel, platinum and copper. YUKOS ADR quotes on foreign exchanges fell by 3.5%, Sibneft shares by more than 5%.
“Negative news does not allow investors to gather their thoughts. Many, it seems, have decided to take a wait-and-see attitude for a while and “not go to sea,” says Maxim Shein, head of the analytical department of BrokerCreditService Investment Company. - The market is very unstable now. Quotes fluctuate wildly, which indicates an increase in investment risk. In general, lowering the rating forecast is a completely logical step given such tension around the company. The main thing is that the operational activities of YUKOS and Sibneft do not suffer. Alexey ROZHKOV |
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