OAO Rosneft dropped to a five-month low as Bank of America Merrill Lynch removed the stock from its list of preferred emerging-market equities, citing concern about the treatment of minority shareholders at OAO TNK-BP Holding. (TNBP)
Rosneft declined as much as 1.7 percent, falling 1.1 percent to 234.01 rubles by 12:42 p.m. in Moscow, the lowest intraday price since Nov. 1. The amount of shares traded was 1.9 million, equivalent to 33 percent of the three-month average.
TNK-BP Holding, the traded unit of oil company TNK-BP, fell to a record low on March 26 as its new parent, Rosneft approved a borrowing limit of about $10 billion from TNK-BP’s affiliated businesses. Igor Sechin, Rosneft’s chief executive officer, warned last year that the company may end TNK-BP’s dividend policy and had no plans to buy out minority shareholders. Pavel Fedorov resigned as Deputy Energy Minister in February, while Svyatoslav Slavinsky replaced Dmitry Avdeev as Rosneft vice- president for finance and economics.
“With the resignation of Mr. Fedorov from the Energy Ministry delaying the passage of reforms, the replacement of Rosneft’s CFO and the treatment of TNK-BP minorities, we are removing Rosneft from Emerging EMEA 1” list, Bank of America analysts said in an e-mailed note today.
Bank of America retains its buy recommendation for Rosneft, according to the report.
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