Russian president Vladimir Putin signed documents yesterday to open up share trading in Gazprom, the world's largest gas producer, moving the firm a step closer to becoming the top global emerging markets stock.
Both houses of parliament have already voted to widen access to Gazprom shares and to scrap the current system under which foreigners are allowed to buy only a small portion of western-proxy shares.
After the documents are published and come into force, Gazprom is expected to send a formal application to large bourses to obtain a full listing.
"This is a key event for our stock market," first deputy prime minister Dmitry Medvedev, who is also Gazprom's chairman, said in comments shown on state television.
"We no longer have stocks on our market which circulate under special, strange rules," he said.
Circulation has so far been limited to four bourses, excluding the country's top MICEX exchange, while foreigners were allowed to trade only western-proxy shares and their ownership in the firm was also limited to 20 per cent.
The rules were put in place in the mid-1990s over fears that the state might lose control over the strategic enterprise.
The government increased its ownership in Gazprom above 50 per cent from 39 per cent earlier this year and has said it saw no problems now for the remaining 49 per cent to be freely traded.
Medvedev said he was confident the liberalisation would further boost Gazprom's market capitalisation, which at $159 billion (€134 billion) is already approaching half of General Electric's $373 billion.
The reform will pave the way for Gazprom to become the most heavily weighted stock in the benchmark Morgan Stanley Capital International global emerging market index, which is tracked by global investors with $3 trillion in assets.
At the crux of the liberalisation is how Gazprom's local shares and London-listed American Depositary Shares (ADS) will be interchangeable - something not entirely clear to investors.
"We expect strong buying of the local shares, rather than selling of the ADSs, to facilitate the closing of the premium," said Erik Mielke from Merrill Lynch.
