OREANDA-NEWS. October 08, 2009. Minister of Economic Development Elvira Nabiullina discussed privatization plans for next year at a government meeting, stating that an increased target (RUB80bn) for privatization proceeds is envisaged in the draft 2010 budget, reported the press-centre of OTKRITIE FC.

According to Vedomosti the government expects the bulk of proceeds (RUB55bn) to combe generated by the privatization of strategic enterprises, with the rest coming from public offerings of large companies. In particular, Minister Nabiullina mentioned sales of a 20% stake in Sovkomflot (shipping) and a 13.1% stake in Rosgosstrakh (insurance) as potential IPO candidates. At the same time, she explicitly stated that shares of Rosneft, Gazprom Neft, Sberbank, VTB, Russian Railroads, and Aeroflot would not offered for sale in 2010.

View: We believe this news should remove the short-term overhang concerns for Rosneft, hence should be marginally positive for the stock.

Valuation and action: We maintain a HOLD rating on Rosneft.