OAO Mechel (P:US), Russia’s largest producer of coal for steelmaking, will probably see its preferred shares added into the MSCI Russia index at a scheduled rebalancing May 16, boosting the stock, UralSib Financial Corp. said.
Mechel (MTLR) preferred shares “are likely to be added” to the index after the Justice family sold $528 million of the stock in a secondary offering last month, increasing the free float, said Dmitry Smolin, an analyst in Moscow at UralSib, in a note today.
The result could be a “very positive short-term catalyst for the stock,” Smolin said. UralSib recommends investors buy Mechel preferred stock with a price estimate of $15 an American depositary receipt. They closed at $9.08 yesterday in New York.
Each depositary receipt is worth half a preferred stock.
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