PRESS: VTB says MegaFon’s GDR risk exclusion from MSCI Russia

MOSCOW, Apr 4 (PRIME) -- Global depositary receipts (GDRs) of MegaFon, one of Russia’s leading mobile operators, could be delisted from the MSCI Russia index, as the quotes lost 11.74% in London over March, sliding to U.S. $10.9 as of April 1, business daily Vedomosti reported Monday, citing investment company VTB Capital.

MSCI Russia, or Morgan Stanley Capital International Russia, calculates a company’s weight on the basis of one of the last 10 trading days of April. If MegaFon’s quotes lose 8% more, the operator will not be included into the index, VTB Capital said.

If the company is delisted, an outflow from MegaFon’s GDRs from passive index funds will be $18 million and up to $173 million from active funds, VTB Capital said.

At present, MegaFon has the slightest weight in the index, 0.75%, and the fixed price of its GDRs in the index is at $11 per receipt.

Gazprombank analyst Sergei Vasin said that investors were discouraged by MegaFon’s outlook for OIBDA and capital expenditures. Due to its financial health, the 2016 year will be the last one when MegaFon pays dividends at the level of previous years, the analyst said.

Exclusion from MSCI could suppress the company’s capitalization, Vasin said.

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