Oct. 31 (Bloomberg) -- OAO TMK, Russia’s largest producer of steel pipes for the oil and gas industry, jumped the most in three months after Sberbank CIS recommended buying the company’s depositary receipts.
TMK surged as much as 5.4 percent, the most since July 27, and traded up 5.2 percent to $14.56 by 2:09 p.m. in London, paring its monthly loss to 4.3 percent. Sberbank set the target price at $19.43, according to a note emailed today.
Prices for hot rolled coil, a benchmark steel product for the industry, slumped 5.6 percent in October after falling 3.1 percent in September, according to Metal Bulletin data on Bloomberg. TMK, which benefits from lower steel prices, has a “dominant” 60 percent to 65 percent share of Russia’s seamless pipe market and “established a long term relationship” with oil and gas customers, Sberbank CIS said.
“The company has been gradually expanding its product offering into high value-added products, which should assist top line growth,” analysts including Mikhail Stiskin in Moscow said in the note. “Softening prices for ferrous inputs is another positive factor.”
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