The timing couldn?t have been worse. The Yukos saga moved into its endgame as charges against both the oil company and its biggest shareholders went to court at the end of May. The bankruptcy of what was once Russia?s most valuable company now looks like a real possibility. Investors would have been unnerved anyway, but the start of the trials coincided with a string of bad news and Russia?s leading RTS index slipped, wiping out all of this year?s gains in a week.
Yukos?s share price has been seesawing for the past few months as rumours alternate that the company will shortly become bankrupt or that a rescue deal will be cut with the Kremlin. However, since the arrest in October of Mikhail Khodorkovsky, Russia?s richest man and Yukos?s former CEO, the company itself has been largely unaffected.
Likewise, after shares took a nasty tumble the day after Khodorkovsky?s arrest, investors took president Vladimir Putin at his word and shrugged off fears of a mass renationalization of oligarch-owned blue chips. The RTS resumed its steady growth quickly and went back to smashing all-time highs almost on a weekly basis within weeks of the arrest (see chart).