Bloomberg News

MRSK, Federal Grid Shares Fall on Tariff Increase Cap Report

July 20, 2012

OAO MRSK Holding retreated the most in a week and Federal Grid Co. slid after Vedomosti reported that President Vladimir Putin’s economic council will discuss limiting annual tariff increases today.

MRSK, Russia’s largest electricity distribution company, fell 2.9 percent to 1.771 rubles by the close in Moscow, the most since July 12 and the first drop in four days. Federal Grid, the country’s high-voltage power transmission monopoly, dropped 1.3 percent to 23.67 kopeks.

Capping government-regulated power-price increases at 4 percent, as reported by the newspaper, would be “excessively tough,” VTB Capital’s analysts led by Mikhail Rasstrigin, said in an e-mailed research note. The move “could have a strong negative effect on the sector’s economics,” they wrote.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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