Company

Industry/ System

Risk

Recommendation

Comments

Aeroflot (AFLT)

Airlines RTS-2

Low to med.

Bargain under $100

Coming of very good year in 1997 in which served almost 4 million passengers; has routes to over 94 counties; fleet size stands at 115, and plans to add 15-20 more planes in 1998; current market capitalization is under $300 million

Amursvyaz (AMSV)

Telecom RTS-2

High

Short-medium term buy

Attractive company from fundamental perspective; PE ratio and Market Cap./ Access line is about half the industry averages; price should have growth spurt then follow industry's index

Bor

Chemicals

Very
High

Accumulate

Has about 36% of world market for borates and boric acid; 51% stake in company is scheduled to be auctioned in next few months; extremely low P/BV; needs to improve export capacity

Dalenergo

Energy RTS-3

Very High

Add to portfolio

Very low PE ratio and P/BV; great potential, but risky in that serves Far Eastern Primorsky Region

Gazprom (GAZP) 

Oil & Gas

Med

Long term buy

Russia's gas monopoly is the world's largest producer and distributor of natural gas; trading mechanisms keep price depressed

Himprom Novo-
cheboksarsk (HIMC)

Chemicals RTS-2

Med High

Accumulate

Has very promising project involving the development of crop protection products; appeared very under-valued even before the market crash; trades at a fraction of book value

Irkutskenergo (IRGZ)

Energy RTS-1

Med

Buy under $0.13

Surplus provider of cheap energy; exports to China and Mongolia could send share price soaring if relationship with UES becomes clearer

Kirovsky Plant (KIRZ)

Machine RTS-1

High

Good addition to portfolio 

Has joint venture projects with General Electric and Caterpillar

Lenenergo 

(LSNG)

Energy RTS-1

Low

Buy

Serves Russia's second largest market; good location to participate in European energy projects

LUKoil 

(LKOH)

Oil & Gas RTS-1

Low

A steal under  $10.00

Russia's premier blue chip stock; very aggressive in expanding operations; recently penetrated the US market; price was flirting with $30 before crash; will play large role in Russian market's rebound

Moscow City Telephone 

(MGTS)

Telecom RTS-1

High

Hold

Serves Russia's largest city; very low market capitalization per access line; would greatly benefit from a share split; possible share dilution is big risk

Novosibirsk Electosvyaz (ENCO)

Telecom RTS-1

Med

Buy

Serves large industrial region; market capitalization per access line very low

Pavlovsky 
Bus Plant 
(PAZA)

Machine RTS-2

High

Long term buy

Consistent three year performance; very low PE ratio

Progress - 
AAK 

Helicopters

Very
High

Buy and pray

Extremely undervalued and extremely illiquid; price should take-off when investors look beyond 1^st and 2^nd tier

Rostelecom (RTKM)

Telecom RTS-1

Med

Good buy under $2.80

Market position and long term potential make this near monopoly long distance provider a major bargain at current prices; recently placed a level-2 ADR on the NYSE.

Sakhalinmor-
neftegaz 

(SKGZ)

Oil & Gas RTS-1

Med

Buy under $3.00

Has enormous long term potential through involvement in Sakhalin I and II projects; price could soar if market rebounds

Sber Bank 

(SBER)

Banking RTS-1

Med

Solid buy under $130

Displayed good financial results in first half of 1997; provides relatively safe way to invest in Russian banking industry

Samaraenergo

(SAGO)

Energy RTS-1

Med

Solid buy

Consistent financial results; promising region

Sverlovsk-
energo 
(SVER)

Energy RTS-1

Med

Speculative buy

One of the most undervalued energos; ranks third in electricity output

Surgutnefte-
gaz 

(SNGS)

Oil & Gas RTS-1

Low

Great buy under $0.12

Very strong management and efficient operations; company should benefit from new projects in Baltic Sea area; due to market crash, current price is a major bargain 

Tatneft (TATN)

Oil & Gas RTS-1

Buy under $0.60

Russia's fourth largest oil producer; enjoys favorable relationship with government of Tartarstan; Level-3 ADR expected later this year

Unified 
Energy 
Systems 
(EESR)

Energy RTS-1

Low to Med

Strong buy under $0.20

Accumulate heavily when price is below $0.28; has large stakes in over 70 regional energos; recent board shake up could turn into a big plus; will play large role in Russian market's rebound

Ural Telecom 
(URTC)

Telecom RTS-1

Med

Buy under $20.00

Serves large industrial region; market capitalization per access line very low (especially when compared to Ural Svyazinform); was hammered during market crash largely due to lack of liquidity

Yakutsk-
energo 
(YAEN)

Energy RTS-2

Med High

Speculative buy

Recently added to RTS-2; appears extremely cheap at current price