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. Last Updated: 07/27/2016

S&P to Lift Gazprom Weighting

Gazprom is set to become the single largest stock in the Standard & Poor's emerging markets index by April 23, almost doubling Russia's weighting in the index to 10.2 percent, a Standard & Poor's official said Thursday.

The move means Gazprom stock will account for around $400 million of the $10 billion in investment funds worldwide tied to Standard & Poor's emerging markets index.

"It will take over as the largest stock, displacing South Korea's Samsung," Alka Banerjee, S&P's head of index research in the United States, said Thursday at a news briefing.

The agency's decision will make Russia the third-largest country represented in Standard & Poor's emerging markets composite index, after South Korea and Taiwan. Russia's weighting in the index increases to 10.2 percent from 6.5 percent.

Within the Russian section of the index, Gazprom's weighting will rise from 4.8 percent to 42 percent through four equal steps between now and April. The increase follows the December liberalization of Gazprom shares by the state, which opened up to 49 percent of the gas monopoly's equity to foreign investors.

S&P's decision comes just a week after MSCI said it would not immediately increase Gazprom's weighting in its benchmark emerging markets index until problems converting the gas monopoly's depositary receipts into local shares have been cleared up.

At present, Gazprom's weighting in the Russian section of the MSCI emerging market's index stands at just 5.6 percent. It could jump to over 45 percent, MSCI said.