Capital Research & Management cuts Pharmstandard stake to 4.3%
MOSCOW. July 22 (Interfax) - The investment fund New World Fund, part of the American Funds family managed by Capital Research and Management, cut its stake in the charter capital of Russian pharmaceuticals company OJSC Pharmstandard from 5.69% to 4.3% last quarter, the fund's report says.
Pharmstandard free float is 45.68%, so the fund's portfolio has 9.4% of the company's stock in free float.
As of July 16, there was 17.64% of Pharmstandard trading on the London Stock Exchange and 9.31% on the Moscow Exchange . A controlling stake of 54.31% belongs to Augment Investments Ltd., whose beneficiaries are Viktor Kharitonin and Yegor Kulkov. OJSC Pharmstandard-Leksredstva, a wholly owned Pharmstandard subsidiary, holds 18.74% of parent company charter capital.
Pharmstandard started to buy back shares actively after it announced two major deals on July 8: spinning off its branded pharmaceuticals business and buying the Singaporean company Bever Pharmaceutical.
Several investment banks lowered their recommendations regarding the company's stock to 'sell.' Speaking with Interfax, analysts predicted that investors would be selling off Pharmstandard stock.
The market recoiled from the company news, and Pharmstandard share prices began to fall. When trading closed on July 10, company capitalization on the Moscow Exchange amounted to 70.6 billion rubles, down 16% from the start of the week. The company fell another 21% the following day. Pharmstandard quotations recovered somewhat on July 12, rising 7% on the Moscow Exchange and 3.45% on the LSE.
Pharmstandard-Leksredstva began to actively buy up the cheaper shares in a buyback program, purchasing additional GDR for some 8.018 billion rubles, thereby wrapping up the program, which had an 8-billion-ruble limit.
Analysts predicted the buyback program would support Pharmstandard share value, which after the program finished might go down again. Quotations for the company's shares on the Moscow Exchange were down 1.8% on Monday and 2.8% on the LSE. Current company capitalization is 63.49 billion rubles.
