MOSCOW Nov 25 The MICEX metals and mining index
led Russian shares higher on Monday amid speculation a meeting
between Prime Minister Dmitry Medvedev and Rusal, Mechel and
Evraz could help the heavily indebted companies.
At 1303 GMT, the rouble-denominated MICEX was up 0.4
percent to 1,511 points. The dollar-denominated RTS index
gained 0.1 percent to 1,446 points. MICEX metals and
mining index outperformed, rising 1.2 percent
Medvedev is due to meet the steel and mining companies to
discuss their debt and ways to boost industrial growth, the
newspaper Vedomosti reported on Monday. The Economy Ministry
confirmed a 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 main topic of
discussion. The government's spokeswoman declined to comment.
Analysts said signs of government support for the metals
industry would help the stocks. The Russian economy is growing
at its slowest pace in four years, with industrial output
expected to barely expand this year.
Depositary receipts in Rusal rose 7.7 percent in Moscow
trade. Mechel fell as much as 19 percent in
early trading, then recovered to trade down 2.2 percent.
"If the companies are provided with subsidies or any other
help, that would change the whole picture," said Andrey Yarnyh,
a salesman at UBS in Moscow. "But the capitalisation of Mechel
has declined so significantly that its weight in portfolios of
investment funds is insignificant".
Mechel has fallen 68 percent so far this year, hit by
lackluster coal prices in Asia and Europe and debt woes. The
company said on Monday it had reached agreements with creditors
on covenant holidays for a $1 billion syndicated loan as part of
continuing debt-restructuring negotiations.
The company's debt-to-EBITDA ratio was 9.0 in the first
quarter. One of its covenants says 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 debt, stood at 11.8 at Rusal in the
first six months of the year and at 4.0 at Evraz.
The Russian rouble weakened on Monday, weighed down by
persistent capital outflows. The tax payment period may provide
"There are many exporters, but quite large outflows take
place as well," said Mikhail Palei, a dealer at VTB Capital.
"The nature of the outflows is unclear. One reason is it could
be connected to the central bank's intentions to close dubious
Russia's central bank last week withdrew the licence of
Moscow-based Master Bank, charging it with breaking anti-money
laundering laws and false accounting, among other things.
The rouble was down 0.5 percent at 32.91 to the dollar
and 0.4 percent weaker at 44.51 per
euro. It was 0.4 percent lower against the euro-dollar basket at
Oil prices fell 1 percent on Monday but remained at a
comfortable level for the Russian budget of $109.9 per barrel of
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