VTB Capital says MSCI Russia index could delist MegaFon GDRs soon

MOSCOW, Oct 18 (PRIME) -- Global depositary receipts (GDRs) of mobile operator MegaFon could be excluded from the MSCI Russia index during the November rebalancing and replaced with stocks of local power holding Inter RAO, VTB Capital analyst Ilya Pitersky said Tuesday in a research note.

“At current prices, MegaFon would be excluded from the MSCI Russia. In order for the GDRs to remain in the index, they would need to see a rally of at least 4%, and probably nearer 8%, in the run-up to the cut-off date, according to our calculations. In other words, the scenario in

which MegaFon maintains its place in the index assumes that the stock rises 8% in the near term,” Pitersky said.

MegaFon’s GDRs closed at U.S. $9.72 on Monday on the London Stock Exchange.

The MSCI is to announce the results of its Semi-Annual Review on 14 November. Changes, if any, come into effect after the close of trading on 30 November.

The likelihood of Inter RAO being included into the index increased after the news of a sale of 8.7% in the company by UCP.

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