* Russian miner begins London trading slightly higher
* Blazes trail for fellow FTSE hopefuls Polyus, Evraz
* Placement was oversubscribed from on last day demand-source
By Julie Crust and Megan Davies
LONDON/MOSCOW, Oct 28 (Reuters) - Shares of Polymetal , one of three Russian miners seeking to enter the prestigious FTSE 100 Index, started conditional trading in London on Friday and had a flat start, after pricing at the low end of a range.
The miner along with Polyus Gold and steel maker Evraz are set to make history if -- as expected -- they become the first Russian stocks to enter the blue chip index. The introduction of the three Russian miners would further increase the influence of resource stocks in the FTSE 100.
Polymetal, owned by tycoons Alexander Nesis and Alexander Mamut with Czech investor PPF, is the first to start trading, and the trio hope the new listings will broaden their shareholder base and improve access to capital.
“It offers some confirmation to investors that the Russian government is not generally against Russian companies being included in the index,” said Valentina Bogomolova, an analyst at Uralsib Capital in Moscow.
“Polymetal is the first of the three companies... it is the pioneer in some sense,” she added.
Steelmaker Evraz , part-owned by Chelsea soccer club owner Roman Abramovich, and Polyus Gold, part controlled by tycoon Mikhail Prokhorov, have also filed for premium listings.
Polyus’ plans were postponed when a committee chaired by Russia’s Prime Minister Vladimir Putin delayed a decision on whether to approve the plans, leading some to question whether politics had been a factor.
Polymetal’s shares rose 3.4 percent to 9.51 above the offer price at the start of conditional trading -- which refers to trade ahead of official listing on the exchange. By the close of trading, shares were close to their starting price of 9.22 pounds. Official trading in the shares begins on Nov. 2.
“It is a positive sign ... a confirmation of the strong intention to be included in the FTSE 100 and have a primary listing and to provide the tender offer to remaining minorities,” said Bogomolova.
Shares had priced at 9.20 pounds on Thursday - near the bottom end of the 9.10-10.35 pound price range previously indicated by the company.
Still, a source close to the offer said it was 50 percent oversubscribed on the range that they had set.
“There was huge demand on the last day,” the person said.
“There was actually demand for about a billion dollars with about $400 million coming in on the last day,” the source said, adding that it was helped by the timing of the euro zone deal.
Polymetal will have a market value of about 3.55 billion pounds ($5.7 billion) which, combined with a free float of about 50.7 percent, will make it eligible for a spot in the top index.
Polymetal said in a statement on Friday it raised about 490.8 million pounds from its full London stock market listing after setting a price at 9.20 pounds a share, confirming the price reported by Reuters on Thursday.
Vitaly Nesis, Chief Executive Officer of Polymetal International said in a statement it received an “excellent response from existing shareholders as well as new investors”.
While a total of 47 Russian companies have their shares traded on London’s main market, the vast majority are in the form of global depositary receipts, effectively a certificate of foreign ownership of a Russian domestic share.
Moving to a premium listing requires a significant free float and more exacting standards of corporate governance, but brings with it access to additional tracker funds which follow the index.
Being a premium-listed company can also help a company clinch deals or make it a more attractive takeover target.
Severstal dropped plans for an IPO of its Nord Gold unit, Russia’s second-largest gold miner, in February that it hoped would raise up to $1.5 billion.
HSBC and Morgan Stanley are acting as joint sponsors to Polymetal, Deutsche Bank, HSBC and Morgan Stanley are acting as joint global co-ordinators and together with VTB Capital, as joint bookrunners in relation to the Offer.
Collins Stewart acted as co-lead manager.