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. Last Updated: 07/27/2016

Profit Data, ADR Program Hold Aeroflot Stock Aloft

Corrections





In an article on Page 13 Tuesday headlined "Profit Data, ADR Program Hold Aeroflot Stock Aloft," the air carrier's American Depositary Receipt program should have been reported as a Level 1 program, which trades over-the-counter.





Aeroflot stocks have enjoyed a stunning rise in the last few weeks, powered by positive financial results and further moves toward tapping foreign markets with a depositary receipt program, analysts said Monday.


The giant Russian air carrier's share price hovered between $140 to $150 throughout the summer until Sept. 12, when it began a rise through an otherwise sluggish market that would carry it 26 percent from $146 to Monday's 52-week high of $184.


Leaked news of financial results officially released Sept. 17 may have provided the impetus, analysts said. The company disclosed pretax profits for the first half of 1997 of about $33 million, a number expected to grow to $80 million by year's end. That compares with $35 million for the whole of 1996.


One analyst said Aeroflot shares have jumped in the past due to illiquidity, but current movements are based on widespread interest in the airline's plans to take back domestic routes.


"Now, Aeroflot is up because investors realize the company is not only an international airline, but wants to take back domestic routes," said James Fenkner, head of research at CentreInvest Group.


Meanwhile, Aeroflot has signed on Salomon Brothers as financial adviser for a Level 2 American Depositary Receipt program, in which the company issues share look-alikes backed by existing stock that allow Aeroflot to be listed on foreign exchanges. Earlier, the company had planned a Level 1 ADR program, which would have traded only over the counter.


The company has announced a November roadshow for the ADR program in New York.