MOSCOW Nov 25 The MICEX metals and mining index
led Russian shares higher on Monday before a government meeting
between Prime Minister Dmitry Medvedev and heavily indebted
firms Rusal, Mechel and Evraz.
At 0816 GMT, the rouble-denominated MICEX was up 0.3
percent to 1,509 points. The dollar-denominated RTS index
was up 0.2 percent to 1,447 points.
Medvedev will meet the steel and mining companies to discuss
their debt loads and ways to boost industrial growth, daily
Vedomosti reported on Monday.
The Economy Ministry confirmed a government meeting on the
metals and mining industry would take place on Monday, but did
not say which companies would attend.
Metals industry sources said Rusal, Mechel and Evraz were
invited and that their debt would be the primary topic of
discussion. The government's spokeswoman declined to comment.
Depositary receipts in Rusal rose 6.6 percent in Moscow
trade. Mechel fell as much as 19 percent in
early trading, but later recovered, to trade down 2.2 percent.
"Mechel local shares dropped on large volume, looks like
someone sold stock that was used as collateral," a salesman at a
Western bank said in a note to clients.
The Russian economy is growing at its slowest pace in four
years with industrial output expected to barely expand this
Analysts said signs of government support for the metals
industry would be positive for the stocks.
"The meeting itself stresses that the government considers
the major metals and mining companies to be important, and
intends to support them if the challenging situation with metals
prices continues," analysts at VTB Capital said in a note,
expecting some renewed buying of the stocks, especially Mechel,
which strongly underperformed this month.
Mechel is undergoing debt restructuring negotiations. The
firm's debt-to-EBITDA ratio was 9.0 in the first quarter, while
one of its covenants states the ratio should not have exceeded
7.5 in the first half of 2013.
Net debt to core profit (EBITDA) ratio, a measure of a
company's ability to pay off debts, stood at 11.8 at Rusal in
the first six months of the year, and 4.0 at Evraz.
The Russian rouble weakened on Monday. The rouble was down
0.3 percent at 32.85 to the dollar and 0.3
percent weaker at 44.47 per euro. It was 0.3
percent lower against the euro-dollar basket at 38.08.
For rouble poll data see
For Russian equities guide see
For Russian treasury bonds see
Russia in graphics: