Alfa Bank forecasts unstable market on higher political risks

Alfa Bank analysts forecast the situation on the Russian market will be getting more unstable upon an increase in political risks caused by anti-oligarch campaigns. The bank's analytical review says that a reduction in the number of outstanding shares, abundant liquidity and an expected postponement of new IPOs will make domestic investors the main driving force on the market, and their sentiments could cause significant fluctuations in share prices.

Alfa Bank analysts reported a risk of tax increase in the oil sector, therefore, they recommended turning attention to stable blue chips and second-tier stocks oriented to the domestic market. These are the securities that are expected to be the winners in the first half of the next presidential term of Vladimir Putin (Putin is expected to be elected Russian President for a second term in the spring of 2004). Gazprom remains the only optimal choice for investors now, and Norilsk Nickel is gradually becoming a blue chip too, as this mining and smelting company attracts steady interest of the global investment community.

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