CBS Investment

New Russian-Ukrainian gas crisis with the EU may come up soon. The Minister of Energy of the Russian Federation Sergei Shmatko and the European Commissioner for Energy Andris Piebalgs were to meet on June 2-3 in Brussels. The agenda was all about the critical situation of the delivery of Russian gas to Ukraine. But the meeting did not take place for some unknown reasons.

Shmatko, who did not go to Brussels, said that the situation was serious – gas «reality show» could happen again. He lamented that the EU is not enough active in this matter. «We have informed the management that, in our opinion, EU countries do not have a proactive position regarding this matter», – emphasized the minister.

In his turn, Vice Premier, Finance Minister Alexei Kudrin, reported on June 1 that the head of the Russian government Vladimir Putin had sent a letter to the International Monetary Fund (IMF), where he drew attention to the importance of financial support to Ukraine so that it does not disrupt deliveries of Russian gas to Europe.

Kudrin added that a similar letter was sent to the EU which, given the criticality of the situation simply must respond. «We believe that the EU should also be concerned to avoid failure. Ukraine is on the line where it is not able to fully provide payments for gas », – Kudrin emphasized.

Meanwhile, Ukraine ceased pumping predetermined volumes of gas into storages and, accordingly, ceased to pay for the lost fuel. The fact that she had almost nothing to pay for gas, Ukrainian Prime Minister Yulia Tymoshenko acknowledged at the meeting with Vladimir Putin, in Kazakhstan, May 22. She asked Russia to provide payment for gas transit for five years in advance, because that was the only way to solve the problem. But – she was refused.

The official representative of «Gazprom» Sergei Kupriyanov indicated that the shortage of fuel complicated Ukraine gas transit to Europe. «We are concerned about this situation and try to convey this concern to our colleagues in Europe. If now, in summer, underground storage facilities in Ukraine are not adequately filled, it will be very difficult for the Ukrainian colleagues to comply with their obligations to transport gas “, – he said.

Surprisingly there is no reaction from the EU yet. In March of this year it signed a treaty with Ukraine behind Russia’s back that it would modernize the Ukrainian gas transmission system. But Brussels is not in a hurry to invest in the salvation of the Ukrainian economy. And also the meeting of the European Commissioner for Energy and the head of the Minernego of Russia foiled. It is clear for everyone: if the gas crisis happens again, the sufferers will be European consumers.

At the same time, the value of the securities of one of the largest glass manufacturers in Japan, Asahi Glass Co. increased by 5.35 per cent, after the analysts of several financial companies – JPMorgan Chase & Co., Mizuho Securities and Goldman Sachs – raised their recommendations on them from “neutral” to “buy” and put the Asahi Glass Co. in the list of companies whose shares were recommended to assure the purchase.

Analysts of JPMorgan Chase & Co. also increased recommendations on the shares of one of the leading manufacturers of LCD-monitors, Nippon Electric Glass Co. to “above market”, and as a result the quotes the company soon grew to 8.2 per cent.

Chinese oil company-giant re-emerged as the largest in the world with its market capitalization.

Every year in June, the newspaper The Financial Times publishes top FT 500, which is the rating of the largest capitalized companies in the world. A month before the publication of the rating, it became apparent that despite the crisis and the fall in oil prices, the fight for the championship will be the oil industry: the Chinese governmental PetroChina and American private company Exxon Mobil.

On May 25, the world’s news agencies reported that the capitalization of PetroChina on the Shanghai Stock Exchange rose by three per cent and reached the mark of the 336 billion dollars. At first glance in this mediocre news there was only one thing interesting: namely, the three per cent was the lacking number for the Chinese company in order to become the most expensive company in the world.

The point is that the main competitor of the Chinese company – Exxon Mobil – cost 335.9 billion dollars as a result of trades on Friday, May 22. On May 25, they were not able to beat the record of PetroChina: the tender in the United States on that day did not take place because of the national holiday – the Day of Remembrance.

On May 26, shares of PetroChina in Shanghai went down by 0.08 percent. Thus, the investors of the American company had only to slightly increase the value of Exxon Mobil in order to regain its title of the largest in the world. And so it happened: on May 26, Exxon Mobil shares went up by 1.42 per cent, while the capitalization became 340.65 billion dollars.

Who will be put on the first place of FT 500 is already known, as the classification is drawn up by market capitalization by March 31. If this time no surprises happen and reporting date will not be changed, then ExxonMobil will be the first.

Since the results of bidding for major world markets are published in real time, we have an opportunity to see how the capitalization of the largest companies has changed in the world during the past year. Thus, despite the fall in oil prices, their places among the largest companies retain not only Exxon Mobil and PetroChina, but also another oil and gas corporation – Royal Dutch Shell.

Another candidate for the considerable drop in the ranking became “the bronze prize-winner” of last year – General Electric. During not the whole year the capitalization of company decreased from 370 to 139 billion dollars. So this time, General Electric will almost certainly not be in the first three. True, although the almost all American manufacturer in the world (from light bulbs to aircraft engines) should not worry: in 2009 it headed one of the most prestigious rankings – Global 2000, which is compiled on the basis of market capitalization, revenues, assets and profits.

U.S. congressional budget analysts have raised their estimate of the net cost to taxpayers for the government’s financial rescue program to $356 billion, an increase of $167 billion from earlier estimates.

The Congressional Budget Office had originally projected the $700 billion Troubled Asset Relief Program would cost taxpayers $189 billion.

The additional cost, which applies to TARP spending for fiscal years 2009 and 2010, was included in the CBO’s March projection of a $1.8 trillion deficit for fiscal 2009, which ends September 30.