OREANDA-NEWS. October 22, 2009. Sistema held an annual investor day. The areas of focus were recently acquired oil assets, telecom assets in India, and overall M&A strategy, reported the press-centre of OTKRITIE FC.

Sistema sees significant upside in the acquired oil assets, both in upstream and downstream, but did not provide detailed guidance in this area.

Developments in India are ahead of expectations with a network already built. The company is now getting 300,000 subscriptions/month, however the ARPUs are still below expectations. Shyam is expected to be EBITDA-neutral within 3 years and will not be sold to MTS before it can demonstrate profitability and value.

Sistema plans to focus on acquisitions in sectors in which it already owns assets: so, look toward oil and gas, utilities, technology and consumer. However, Sistema stressed the importance of not increasing corporate debt and thus will need partners for M&A.

View: We expect positive sentiment towards both MTS and Sistema shares. For MTS it is important that the Indian risk remains with Sistema in the medium-term. With Sistema, we believe that the expectation of M&A deals and the attraction of some strong partners might serve as catalysts for the stock.

Action: After the MTS investor day on Monday and Sistema investor day on Tuesday, we expect increased buying interest in both stocks.