OAO Alrosa rose the most in a week as the world’s biggest diamond producer announced the price range for its share placement.
Alrosa added as much as 2 percent, trading up 1.2 percent at 35.20 rubles by 1:45 p.m. in Moscow, the most since Oct. 3 on an intraday basis. The amount of shares traded was equivalent to about 20 percent of the three-month average.
Alrosa set the price range for its planned share sale at 35 rubles to 38 rubles apiece, lower than an earlier estimate of 38 to 44 rubles a share by VTB Capital, reported by Interfax on Oct. 2. The share placement will be the first state asset offering since VTB Group’s $3.3 billion May equity sale.
“Today the stock is bouncing up to match the price range,” Andrey Tretelnikov, an analyst at Rye, Man & Gor Securities, said by phone from Moscow.
The Russian government and the eastern Republic of Sakha, where the monopoly’s main mines are located, are selling a combined 14 percent stake, while Alrosa will offer about 2 percent in treasury stock, the company said on Oct. 2. To attract investors Alrosa’s supervisory board pledged to pay no less than 35 percent of net income in annual dividends starting from payments for this year, according to today’s statement.
“The current share sale timing isn’t the best in terms of the market environment so shareholders are looking to sell at a safe price,”Tretelnikov said.
The Micex Index (INDEXCF) dropped 0.4 percent to 1,506.65 as U.S. lawmakers struggled over an agreement to raise the nation’s debt limit, reducing appetite for riskier assets. Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Alrosa sale will be Russia’s first mining share sale after a unit of GLG Partners delayed Russian coal miner Sibanthracite Plc (SIB)’s planned offering in London in July, citing market weakness and a lack of interest in mining stocks.
Russia plans to maintain control of Mirny-based Alrosa, which produces a quarter of the world’s diamonds by value and more rough diamonds than De Beers by carat.
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