Federal Grid Falls Most in Month on Goldman Downgrade

Federal Grid Co., Russia’s power distribution monopoly, fell the most in a month in Moscow trading after Goldman Sachs Group Inc. downgraded the stock on the outlook for earnings.

Federal Grid dropped as much as 6.5 percent, the most since July 10, to 0.229 rubles and closed down 5.7 percent at 0.231, the lowest level since July 31.

Goldman Sachs cut its recommendation on the stock to “neutral” from “buy,” lowering its price estimate to 1.0 cent from 1.3 cents.

Russia’s plan for power rate increases next year “leaves very limited space for the Federal Grid tariff increase,” Goldman Sachs said in a note today. “We now assume a 10 percent tariff increase in 2010 versus 39 percent.”

To contact the reporters on this story: Charlie Duxbury in London at cduxbury@bloomberg.net Laura Cochrane in London at lcochrane3@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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