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. Last Updated: 07/27/2016

Gazprom Shares Hit St. Pete Floor

The monopoly on trading in Gazprom shares held by the Moscow Stock Exchange was weakened Monday when a major stock depository began doing business in St. Petersburg.

The St. Petersburg Stock Exchange — in conjunction with the Russian Trading System — is now the platform for trades of stock that are held by Gazprombank in depository.

Formerly, the Moscow Stock Exchange had a contract with Gazprombank to host all trades, but it was broken when the exchange officials last week demanded that all investors who wished to trade through MSE move their shares from Gazprombank to the Depository Clearing Union.

At the time, this was a costly alternative to investors. Shareholders would have lost five days of trading to allow for the shares to be physically moved. And when MSE announced the changes, the cost to change depositories was set at about $1,000 per million shares.

Since then, the cost has been halved.

Traders and securities officials say it is too early to tell whether the change of venue will have much of an impact.

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"It is difficult to say whether prices or volumes will be affected," said Alexei Trunayev of Aton brokerage. "We need to wait until the end of the week to see how and if the spreads change."

In the mid-1990s, the government permitted the St. Petersburg Stock Exchange — along with Moscow, Novorossiisk and Yekaterinburg — to trade Gazprom stock, which has circulated on the St. Petersburg exchange since 1997, said Denis Tesluk, head analyst of the St. Petersburg exchange.

And because of the 1999 agreement, those Gazprom holders who decide to register with the St. Petersburg exchange will have access to the RTS.

"We hope this will lead to an increase in volumes for our market," Tesluk said.

Not every investor has shifted to the new exchange, said Gazprombank vice president Alexander Chernoivan. "Many waited to see whether the changeover would go smoothly, and I think we will see many moving their trading to St. Petersburg this week."

On the RTS, Gazprom stock was down 1.76 percent to 57.4 cents on volumes of $521,133. On the Moscow Stock Exchange, the stock was up 1.5 percent to close at 58.5 cents on volumes of more than $2 million.