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Reports Russia

Russian stock market daily morning report (May 15, 2014, Thursday)

May 15, 2014, Thursday, 11:35 GMT | 06:35 EST | 15:05 IST | 17:35 SGT
Contributed by Veles Capital


We expect the Russian market to open mostly in the green zone, but during the day the market is unlikely to show any single trend and possibly corrects by the middle of the day.


Main events

Consolidation of KES Holding will be conducted basing on Volzhskaya TGK.

We suppose that the most likely scenario of switching to a single share is conducting an additional emission of Volzhskaya TGK and conversion of the shares of other assets into the shares of the additional emission. Until the conversion coefficients are announced, it would be complicated to say which share would be the cheapest way to enter the joint asset. We also suppose that in case a share of stockholders does not agree with the process of assets’ restructuring, than their shares might be bought back by the principal holder. In that case exit through the stock of TGK-6 with a 11.63% premium vs the market would be the best option. The other shares are trading above the average prices for the recent six months.

MSCI Russia was rebalanced in line with expectations.

According to the messages of Interfax in course of rebalancing of MSCI Russia, the shares of FNC got excluded from the index and stock of Alrosa was included in it. The share of Alrosa formed 1% of the index.