Russian Grids was removed from the index along with Novolipetsk’s GDRs and Mechel’s ADRs as part of MSCI’s semi-annual rebalancing, according to a statement after the market close yesterday. Funds that track the MSCI indexes readjust their portfolios based on the changes, which take effect June 3.
“Being excluded from MSCI is not positive for these stocks,” Sergey Fundobny, head of research at Arbat Capital, said by phone from Moscow. “This is driving their declines today.”
Russian Grids, formerly known as MRSK Holding, slumped 5.5 percent to 1.285 rubles in Moscow. The amount of shares traded was 1.4 times above the three-month average. Novolipetsk fell for the fourth day, losing 3.9 percent to 45.95 rubles, while its global depositary receipts declined 4.1 percent to $14.58.
Mechel (MTLR), Russia’s biggest coking coal producer, dropped 2.2 percent to 113.70 rubles, while its American depositary receipts retreated 3.4 percent to $3.68 yesterday, the lowest since April 22.
Russian Grids lost 40 percent over the last 12 months, while NLMK’s GDRs have tumbled 12 percent and Mechel’s ADRs have retreated 43 percent.
OAO PhosAgro, the largest European phosphate-fertilizer producer, declined 5 percent to 1,277.40 rubles. The GDRs sank 5 percent to $13.62. VTB Capital and Sberbank Investment Research expected PhosAgro’s GDRs to be added to MSCI Russia after PhosAgro’s controlling holders, Andrey Guryev and his family, sold a 9 percent stake in the fertilizer producer in April to gain entry to the index.
“Rather surprisingly, PhosAgro was not included” in the gauge, Sberbank CIB’s analyst Iskander Abdullaev, said in an e-mailed note.
OAO RusHydro, Russia’s biggest renewable energy producer, retreated 3.3 percent to 52.89 kopeks in Moscow. The GDRs declined 2.7 percent to $1.635. MSCI cut the stock’s weighting in the Russia Index (RDXUSD) to 0.79 percent, according to the report.
OAO Gazprom, Russia’s biggest company and natural gas export monopoly, increased 1.9 percent to 124.78 rubles. The stock’s weighting was lifted to 21.8 percent, according to MSCI’s note. The GDRs gained 2 percent to $7.925 in London.
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