Mechel In Dialogue with Authorities
The stocks and depository receipts of Russia’s steel giant Mechel that lost nearly a half of their worth in the recent two weeks are manifesting skyrocketing growth. Mechel surged over 18 percent on NYSEX Wednesday and gained 20 percent on RTS yesterday. The investors are buying at large on hopes that Mechel co-owner Igor Zyuzin will sort out difficulties. The dialogue with authorities has already begun, the sources specify.
ADRs of Mechel surged 18.34 percent to $22 on NYSE Wednesday on turnover that was well above average and reached 6.195 million stocks. Mechel gains on the U.S. floors fueled the demand in Russia. The company soared 20.42 percent to $23 on RTS yesterday and the turnover was nearly five fold above the past month’s average – 5,000 vs. 1,300. On NYSE yesterday, Mechel ADRs grew 7.96 percent to $23.75 by 9:15 p.m. MSK and the turnover was above average already in the first three hours of trading.
The reason of such extreme popularity of Mechel is the news that Igor Zyuzin, general director and principal co-owner of the company, has set to constructive dialogue with authorities.
“Igor Zyuzin met with Vice Premier Igor Sechin several times,” said a source close to Mechel. The last meeting happened in early this week, another source said. Yesterday, Sechin met with top managers of the country’s biggest metal and coal companies, according to the sources.
The sources say that in time of the meetings, Zyuzin endeavored to explain that Mechel applied no transfer pricing and, being a company listed in the United States, it provided detailed accounting reports. “As a company quoted on NYSE, we are under the Regulation FIN 48 that sets forth a separate audit for profit tax risk,” said a source close to Mechel.
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All the Article in Russian as of Aug. 08, 2008
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