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. Last Updated: 07/27/2016

MT Index Changes Its Stock Profile

All four timber companies previously listed on the Moscow Times Index of 50 leading stocks will be removed from the roster starting Tuesday, as many analysts view the companies as tightly held and illiquid.


In addition, LUKoil's subsidiary Permneft, Magnitogorsk Ferrous Metal and oil transportation company Volga Tanker also will be removed from the index. The seven companies will be replaced by oil holding Yukos, Aeroflot, three energy and two telecommunications firms.


The MT Index Advisory Board decided Aug. 21 to include on it list shares in Bashkirenergo, Chelyabenergo, Kuzbasenergo, as well as Chelyabinsksvyazinform and Samarasvyazinform.


All of the companies were initially listed on the Russian Trading System's RTS-2, an index for less-liquid shares, at the beginning of the year. Since then, all but Kuzbasenergo made the jump to the RTS-1 index of more liquid shares.


"The markets for those regional energy and telecom shares got a significant jump-start and are very well developed now," said Anton Lobanov, an analyst with Skate financial services, the agency that compiles the index.


Permneft was replaced with Yukos, "one of the most traded of the large oil holdings," Lobanov said, because almost all Permneft shares have been converted to LUKoil shares and "cease to exist."


Aeroflot was added to the index because, although its shares are not listed on RTS, they have been in great demand.


Aeroflot also received high marks for the number of shares held by employees and small investors, typically the most accessible to investors.


Shares in the timber sector -- representing companies Syktyvkar, Kondopoga, Bratsk and Kotlass Pulp and Paper -- were displaced due to their low liquidity and capitalization.


"They were dead and strongly controlled," Lobanov said of the timber companies. "They are clearly divided and have no proper free market."


The MT Index advisory board, composed of Moscow traders and analysts, removed Volga Tanker based on a decision to limit the index to companies with capitalization of more than $100 million.