Mechel, NLMK, Russian Grids dropped from MSCI Russia Index
MOSCOW. June 3 (Interfax) - The GDR of steelmaker Novolipetsk Steel (NLMK) , the ADR of coal and steel group Mechel and the common shares of Russian Grids are being excluded from the MSCI Russia Index.
The results of the semiannual review, which were announced on May 15, go into effect on June 3. The weight of NLMK, Mechel and Russian Grids in the index was respectively 0.5%, 0.27% and 0.34%.
VTB Capital analysts believe that exclusion from the index will result in an outflow of about $271 million from NLMK American Depositary Receipts, $145 million from Mechel Global Depositary Receipts and about $223 million from Russian Grids shares.
No new companies were added to the MSCI Russia Index.
At the same time, changes go into effect to the MSCI Russia 10/40 Index. The distribution of weight in this index is important for the assets of funds investing in Russia as many of them are required to comply with UCITS III rules, which prohibit allocation more than 10% of assets to the shares of one company.
The depository receipts of retailer Magnit have moved to fourth place in the MSCI Russia 10/40, pushing out the pair of Mobile TeleSystems (MTS) and Sistema JSFC. Following the review, Magnit was given a weight of 9% in the index, while MTS/Sistema was reduced to 4.5%, with MTS slashed from 7.0% to 3.66% and Sistema from 1.7% to 0.87%.
MSCI indexes are tracked by many investment funds that invest in the stocks included in proportion to their weight in these indexes, and also develop complex structured products based on indexes. Inclusion in the MSCI index guarantees a stock greater liquidity.
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