• Russian stock market daily morning report (August 26, 2015, Wednesday)

    Considering the dynamics yesterday and the negative close of the American market, we expect mildly negative dynamics at the Russian market.

    Main events

    Revision of MSCI Russia 10/40 turned out to be within the frames of expectations.

    MSCI index provider, expectedly, kept the “four” heavyweights (Gazprom, LUKOIL, Sberbank, Magnit) unchanged in the MSCI Russia 10/40.

    Uralkaliy has adopted the stock and GDR buyback program for up to 1.32 bn USD.

    Buyback will be conducted under the same conditions as 11.56% of shares have been bought back in May – for 16 USD per GDR and 3.2 USD per share. At the expense of using the REPO mechanism, the number of Treasury shares will be reduced and will not exceed 19-20%, meaning there will be no obligatory offer to the minority. Supporting the listing in London is no longer considered as the strategic aim of the company. After cutting the free float, Moscow Stock Exchange might downgrade the listing level of the company’s stock. All of the above might lead to reduction of the quotes of Uralkaliy as of the end of buyback: we recommend closing long-term positions in Uralkaliy. Note that de-listing of Uralkaliy at LSE and reduction of liquidity allows PhosAgro to occupy the place of Uralkaliy in the indices – we recommend buying PhosAgro.

    Contributed by Veles Capital
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