RUSSIA’s presence on the UK’s top share index will go up this Wednesday if two of its newly London-listed metals and mining groups are admitted in the quarterly changeover of its constituents.
Evraz, the steelmaking group part-owned by Chelsea owner Roman Abramovitch, and Polymetal, Russia’s biggest silver producer, have each swapped their global depositary receipt listing for shares on the London Stock Exchange’s main market and applied to join the FTSE 100.
If given the green light by the FTSE committee at its quarterly review on Wednesday, both groups will join the benchmark index despite vocal opposition from some fund managers concerned about the level of say that minority investors would have in the oligarch-controlled groups.
Only Polymetal is making a full 50 per cent of its shares public, meeting the condition for foreign-domiciled groups, while Evraz has re-domiciled its business to a holding company in the UK and is listing with just a 23 per cent free float.
Kazakh mining group Eurasian Natural Resources Corporation (ENRC), which was accepted into the FTSE 100 after floating with an 18 per cent free float in 2007, caused headaches for investors this summer when four of its board members quit after voicing corporate governance concerns.
But the addition of more high growth emerging markets resources companies has been cheered by other fund managers happy to invest in firms that deliver high returns and comply with the UK’s stringent corporate governance regime.
A third company, Irish building materials maker CRH, will also be admitted to the FTSE 100 pending the meeting’s outcome, while South African miner Lonmin and asset manager Investec, and satellite maker Inmarsat, are likely to be shunted out.