Inclusion in FTSE 100 drew $250-$300 mln into Polymetal Int shares - Nesis
MOSCOW. Dec 22 (Interfax) - Polymetal International plc's inclusion in the FTSE 100 index generated an additional $250 million-$300 million of demand for the silver and gold miner's shares, the company's chief executive and board director, Vitaly Nesis said in an interview with Interfax.
"Investment bankers estimate the additional demand from inclusion in the FTSE 100 index, that is the inflow of money into shares, at about $250 million-$300 million. This was an immediate effect that took place right after the review of the index on December 7 thanks to the money of passive index funds," Nesis said.
Polymetal Int's official inclusion in the index took place on December 19.
However, Nesis said, Polymetal Int still has to persuade funds that do not simply follow the index, but "embrace" it, investing only in index stocks without necessarily maintaining the proportion, that the company is a good investment.
"Within the MSCI Russia and MSCI EM Eastern Europe, no one, I think, had any doubts that Polymetal is a quality issuer. Many investors who work with the FTSE 100, naturally, initially have big doubts about investing in a Russian company. And the most important challenge that we now face is convincing semi-passive funds, those that embrace the index, that Polymetal International is a worthy company in which they can invest like any other in the base calculation of the FTSE 100. So the inclusion in the index itself is only the first step on the way to using the premium listing on the London Stock Exchange as an instrument for raising the company's capitalization," Nesis said.
Asked about the possible impact on the company of a government initiative to restrict free float abroad for companies that own strategic assets in Russia, Nesis said: "I think that in a reasonable interpretation such an additional regulation will not have any impact on us."
"If we are talking about restricting the share of ownership by one shareholder within the free float, then Polymetal Int's charter already stipulates that a shareholder who acquires more than 10% without the approval of the board of directors automatically loses voting rights. In other words, internal corporate procedures are such that the provisions of Russian legislation concerning investment in strategic assets are automatically observed," Nesis said.
When Polymetal Int's shares began trading on the LSE, the free float exceeded 50%.
Jersey-registered Polymetal International plc, which is listed in the premium segment of the LSE, controls more than 83% of OJSC Polymetal, Russia's largest silver producer and one of the country's top-five gold miners, as a result of a corporate restructuring carried out in the fall of 2011.