OAO Gazprom overtook China Mobile Ltd. and General Electric Co. to become the world’s third-largest company by market value after its chairman, Dmitry Medvedev, became Russia’s president.
Shares of state-run Gazprom, the world’s biggest gas producer, rose 6 percent in Moscow yesterday, pushing its value to $347.4 billion. The market value of China Mobile Ltd., which has more users than the U.S. has people, declined 1 percent to $337.3 billion. Gazprom overtook GE after the market value of the Fairfield, Conn., industrial giant fell 1.3 percent to $325 billion.
Exxon Mobil Corp., at $476 billion, is the world’s most-valuable company, followed by PetroChina Co., China’s largest oil producer, at $441 billion.
Mr. Medvedev might continue dismantling domestic price caps for natural gas designed to contain inflation and reduce costs for households and industry. The government has said it wants to increase prices so that sales in Russia are as profitable as European exports by 2011. Russia, the supplier of a quarter of Europe’s gas, is the world’s second-biggest gas consumer.
“A Medvedev presidency is the perfect political cover for Gazprom,” said James Fenkner, principal of Moscow’s Red Star Asset Management LP, which manages about $100 million, including Gazprom shares. “He’s going to help push through domestic price increases for gas, and that will be the next great positive catalyst for this company.”
During Mr. Medvedev’s six-year tenure as chairman, Gazprom’s value climbed more than 32-fold as fuel prices rose and the company gained oil, electricity and coal assets.
Gazprom’s expansion, including buying OAO Sibneft from billionaire Roman Abramovich in 2005, helped Russia’s government increase its control over national oil production to more than a third from about 6 percent at the start of Vladimir Putin’s first presidential term, in 2000.
Gazprom shares rose 4.3 percent yesterday after Mr. Medvedev was sworn in as Russia’s third president and nominated Mr. Putin to be his prime minister. Mr. Medvedev will quit as Gazprom’s chairman next month after a new board is elected, spokesman Sergei Kupriyanov said.
“Gazprom’s market value may well be $1 trillion before Russia gets a new president,” said Chris Weafer, chief strategist at Moscow-based UralSib Financial Corp. “Overtaking GE and China Mobile is not temporary.”
BIGGEST BUSINESSES
A surge in Gazprom’s share price yesterday made the Russian gas producer the world’s third-largest publicly traded corporation.
RankCompany Market value
(in billions)
1. ExxonMobil$467
2. PetroChina 441
3. Gazprom347
4. China Mobile337
5. General Electric325
6. ICBC*289
7. Microsoft253
8. Petrobras236
9. Royal Dutch Shell221
10. Berkshire Hathaway 216
*Industrial and Commercial Bank of China
Source: Bloomberg News, Forbes.com
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