Rossiyskaya Gazeta: Why Gazprom’s shares hit record highs

The price of Gazprom’s common shares on Monday beat its 2008 record high. One of the main factors, driving the company’s capitalization is the continued rise of stock exchange prices for gas in Europe and there are indications that the energy sector will only grow.

On Monday afternoon, Gazprom shares on the Moscow Stock Exchange at their peak reached 369.9 rubles ($5.07 - TASS). In the evening, the surge continued: by 21:00 Moscow time their price approached 380 rubles ($5.21 - TASS). This is another historic high since the previous one of 369.5 rubles was set in the spring of 2008. Thus, Gazprom’s capitalization approached $100 bln, but in 2008 with the same share prices, there was a much stronger ruble and the company’s capitalization was 3.5 times higher.

There is a de-facto worldwide energy crisis underway caused by the gradual exit from the pandemic, accompanied by a spasmodic increase in fuel demand, with expectations not coinciding with actual consumption. Gas supplies in a number of countries have been depleted as a result, particularly in the EU. Additionally, there is a number of countries promoting a switch to "green energy" which also increases the price of gas.

Gazprom’s shares are rising against the background of growing gas prices in Europe. On Monday, they surpassed $1,200 per 1,000 cubic meters, thus quadrupling since the beginning of the year. Gas in Asia is getting more expensive as well. At the same time, Gazprom is fulfilling its obligations within the framework of its contracts, something the company has emphasized repeatedly.

VTB Capital’s analytical survey indicated that the price of Gazprom shares grew 2.3-fold since last November and surpassed their forecasted price of $4.50 for 12 months. Expert at BCS World of Investments Albert Koroev thinks that the prices may remain fixed after the historic high was renewed and the accumulated overbought. At the same time, after the overbought is removed, Gazprom shares have chances of going above 400 rubles ($5.49 - TASS) in the event of a longer gas deficit against a background of high gas prices in Europe and the launch of Nord Stream 2. The expert confirms that the professional outlook with regards to the company’s shares is generally positive. The oil and gas sector continues to support the growth of Russia’s equity market, according to Finam analyst Sergey Kaufman. According to his survey, amid the atmosphere of growing gas prices, coal prices in Europe increased by a third over ten days which supports the shares of Mechel and Novatek.

 

Rossiyskaya Gazeta: OPEC+ decides to let global energy crisis rage on

OPEC+ participants have agreed to preserve the deal’s parameters without increasing oil output. In an interview with the Russia-24 TV channel following talks, Russian Deputy PM Alexander Novak said that the earlier planned November growth in oil production of 400,000 barrels per day will continue the process of normalizing the situation on the oil market. Russia’s share in the production growth amounts to about 100,000 barrels per day.

Against the background of the announcement that OPEC+ won’t increase the production rates, prices for Brent oil surpassed $81 per barrel for the first time since October 17, 2018. North American WTI went above $77 per barrel, beating the 2014 record. Many experts expected that OPEC+ would decide on a more rapid increase in oil production under pressure from the US, where gasoline prices rose sharply. Earlier, US President Joe Biden talked about the possibility of dialogue with the alliance on this subject. Sources say that a possible increase of 800,000 barrels per day was discussed at the meeting, yet the parameters remained the same. China won’t be happy either with the alliance’s decision since it already began to sell oil from its strategic stock to drive down oil prices. The preserved parameters do not bode well for the EU where skyrocketing natural gas prices led to more expensive power as well as the soaring prices for gasoline and diesel. This may influence Russia’s internal market since market quotations of gasoline in Russia depend on its export cost.

It is possible to say that in general Russia benefits from the preserved deal’s parameters as the decision was made jointly by 13 OPEC countries as well as Russia, Kazakhstan and Azerbaijan. The agreement was initiated by Saudi Arabia and Russia, but a full consensus is required for a final verdict. Judging by the fact that the OPEC+ meeting lasted less than an hour, the participants did not have any contradictions.

Alfa Capital analyst Denis Badyanov believes that the alliance's decision was predictable and pragmatic. OPEC+ is guided by forecasts that predict a surge in fuel consumption in 2022 to 100.8 mln barrels per day (the same level observed worldwide before the crisis). Accordingly, demand will increase to 4.2 mln barrels per day while simultaneously the market supply will grow. Russia profits from high oil prices not only because of export budget revenues, but also because of taxes on oil producers linked to global oil prices. At the same time, with growing market supply, oil prices will go down, according to the expert. In the short-term view, they may go down from almost $82 to $75-77 per barrel.

 

Kommersant: Major outage hits Facebook, WhatsApp and Instagram

An outage took down Facebook, WhatsApp and Instagram, becoming the most massive one to hit the Internet recently. According to experts, the problem was related to disruptions in the domain name system. The outage impacted Twitter, Google, Amazon and Telegram the users switched to. Advertisers are also among those affected and are counting on compensation from the US-based company.

The incident occurred on Monday, October 4 with users of Facebook, WhatsApp and Instagram experiencing problems worldwide.

According to the DownDetector portal, complaints started pouring in about 18:13 Moscow time. The company did not respond to Kommersant’s inquiry over the reasons for the outage and the amount of damage.

The experts link possible reasons for the outage to Facebook’s internal problems. According to an independent IT specialist Filipp Kulin, the disruption occurred in the company’s internal network. Executive director of the Internet Protection Society Mikhail Klimarev thinks that the outage was caused by a change in the configuration of the company’s DNS services. "It seems that the company was trying to perform some technical updates but something went wrong," he explained. Ivan Begtin, an expert on digital culture, agrees that the problem emerged at the DNS level. This proves yet again that companies shouldn’t "put all their eggs into one basket." "Although Facebook repeatedly emphasized the independence of companies controlled by it, from a technical point of view, right now we are observing the opposite," the expert explained.

Several hours following the Facebook outage, users of Twitter, Google and Amazon began to complain since they switched to these services after the outage, slowing them down. The outage was the most massive on the Internet over the past several years, said Karen Kazaryan, who heads the Internet Research Institute. "Along with users, advertisers have become vulnerable in such situations, since social networks for them are the main advertisement venues and any interruption in operations may mean substantial damages for them," he explained. "We hope that the sides will settle the issue through talks, and compensate lost advertisement opportunities and losses," Rusbrand’s (includes Procter & Gamble, Nestle, Unilever, Coca-Cola, PepsiCo and others) executive director Alexei Popovichev said.

Against the background of the incident, Facebook’s shares dropped 5.34% at NASDAQ. The drop affected the shares of practically all leading IT companies: Amazon went down 3.8%, Apple — 2.6%, Microsoft — 2.4%, Nvidia - 5%, Alphabet — 2.7%, Moderna — 3.5% (all data as of 21:15 Moscow time).

 

Nezavisimaya Gazeta: Ashgabat, Tashkent avoid conflict with Kabul

On October 4, Turkmenistan’s President Gurbanguly Berdimuhamedov arrived in Uzbekistan on a two-day official visit. During talks with his Uzbek counterpart Shavkat Mirziyoyev, in addition to the issues of bilateral cooperation, he will discuss the joint position on the situation in Afghanistan. Regional projects as well as calm in Central Asia depend on stability in that country. Ashgabat, much like Tashkent, intends to actively cooperate with Kabul without waiting for the creation of an inclusive government, as opposed to Dushanbe that insists on it and does not recognize the current Afghan government.

The talks will separately touch on the Afghan issue. Afghanistan is not only a transit country for the two states providing access to seaports but also a significant market for delivery of energy, fuel and lubrication material, food products and basic necessities. The two countries have similar views on settling the Afghan crisis. The Uzbek president repeatedly spoke against Afghanistan’s isolation and Uzbekistan became one of the first countries to provide humanitarian aid there. Turkmenistan is also involved in the humanitarian effort, building schools and hospitals in Afghan rural areas and training local staff. "I would like to note that recently a decision has been made to send another humanitarian cargo as a sign of friendship and good-neighborliness. All of this is, of course, financed with Turkmenistan’s own resources," Turkmen president said in an interview with TASS. He said that Ashgabat is ready to closely cooperate with Afghanistan’s new government formed by the Taliban (outlawed in Russia) and hoped that the transition of power there would be peaceful.

This is particularly important given the statements by Tajik President Emomali Rahmon who refused to recognize the Taliban government accusing it of violating human rights. He insists on creating an inclusive government in Afghanistan with the participation of all ethnic minorities, including Tajiks that amount to 46% of the total population, according to Dushanbe. Last week, he visited the Gorno-Badakhshan Autonomous Region and conducted military parades near the border with Afghanistan which was viewed by the Taliban leadership as meddling in Afghan internal affairs.

After Kabul and Dushanbe pulled their troops to the shared border, Taliban representative Enamullah Samangani criticized the Tajik president for the lack of democracy in his country: "He has been president for 27 years already, will remain president for another 6 years and after that, perhaps, will remain in office. Five parties are allowed to participate in elections in his country, all are pro-government ones, and this esteemed person will advise on holding elections in Afghanistan." In his turn, the Tajik president predicted that the situation in Afghanistan would only get worse.

According to him, the government does everything possible to boost the protection of the border that "serves as a buffer zone for CIS and EU member states," protecting other countries from threats and challenges, including terrorism and extremism, drug and arms trafficking. He urged local residents to be prepared to defend their independence and freedom, and the interests of their state.

All of these did not go unnoticed in Moscow and Tashkent. Deputy Director of the Information and Press Department of the Russian Foreign Ministry Alexey Zaitsev noted that Moscow observes the growth in tensions in Tajik-Afghan relations with concern. Moscow urged Dushanbe and Kabul to "seek mutually acceptable decisions" to de-escalate the current situations. Tashkent has not made any public statements with regards to this but experts think that the situation will be discussed by the two presidents because it concerns stability in the entire region. If a conflict flares up on the Tajik-Afghan border, it will gradually involve all countries in the region and Russia.

 

Kommersant: Armenia shores up support

Armenia is trying to take advantage of the contradictions between Iran and Azerbaijan who recently started a diplomatic standoff and even pulled military equipment to the border. On Monday, Armenia’s top diplomat Ararat Mirzoyan went on a sudden visit to Tehran and met with his Iranian counterpart Hossein Amirabdollahian. This may be viewed as a success. The sides agreed on completing the construction of a road from the Iranian border to Yerevan without crossing Azerbaijan’s territory. At the same time, Alen Simonyan, speaker of Armenia’s parliament, held talks in Moscow.

Earlier, during a meeting with representatives of the Armenian diaspora in Vilnius, Armenian Prime Minister Nikol Pashinyan also mentioned Iran promising "never to forget" that during the first Karabakh war of 1992-1994, Iran served as a "lifeline" for Armenians supplying essential goods to the blocked off republic and stressed the importance of Armenian-Iranian relations.

The new road connecting Iran with the Armenian capital sidestepping Azerbaijan’s soil will resolve Armenia’s issue of transportation links. According to last year’s trilateral agreement by the leaders of Russia, Armenia and Azerbaijan, all regional transport links should be unblocked, however, according to the Armenian foreign minister, Azerbaijan has been stalling the process.

Vardan Voskanyan of the Oriental Faculty of the Yerevan State University thinks that the aggravation of tensions between Iran and Azerbaijan opens major opportunities for Armenia in terms of cooperation with Tehran in the sphere of defense and safety. "Considering statements of the head of Iran’s Foreign Ministry on terrorist presence in Azerbaijan, Yerevan may activate cooperation with the Iranian in terms of joint actions of anti-terrorist nature. On the other hand, with active interaction with Iran and Russia, Armenia may become a site for expanding tri-lateral cooperation on this issue," he told the newspaper.

However, the experts in Baku don’t think that the rapprochement of Yerevan and Tehran has many prospects. "Iran wants to continue to supply Karabakh’s Armenians through the Lachin Corridor, that is why it is going to build a new road," Azerbaijani political scientist Farkhad Mammadov told Kommersant. In the future, trade between Armenia and Iran will still go via a railroad which crosses Azerbaijan’s enclave of Nakhichevan." He dismissed all other statements on terrorists as "laughable."

During his visit to Moscow, the Armenian parliamentary speaker met with his Russian colleague Vyacheslav Volodin as well as with Russian Foreign Minister Sergey Lavrov and Russian Federation Council Speaker Valentina Matviyenko. On Monday it was reported, that the Iranian foreign minister will visit Moscow as early as October 6. Additionally, it was announced that the Armenian PM will also come to the Russian capital soon.

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