Lukoil Says Russian Bank VEB Acquires ‘Major’ Stake

Vnesheconombank, Russia’s state development bank, acquired a “major” stake in Lukoil (50 USD, 0,08%) as the government injects money into the stock market to support the economy.

Below a 5 percent threshold, it’s up to the shareholder to decide whether to disclose the exact size of their stake, said Gennady Krasovsky, an investor relations official at Lukoil.

Neither Lukoil nor VEB spokeswoman Yekaterina Karasina would comment on the size of the holding.

Our view:
We believe that the share purchase is mainly connected to the government intention to support equity markets in Russia. It is very unlikely that this would somehow influence the strategy or development path of the company. VEB is likely to keep Lukoil stake as a financial investment and sell it once the situation stabilized. It is unclear when the share purchase was done but it clearly was one of the major support factors for the share price in the last weeks. We believe that stop in VEB purchase together with stabilizing crude oil price might reverse the trend in the next days.