OREANDA-NEWS. July 16, 2010. Holding MRSK’s CEO Nikolay Shvets announced that he does not anticipate changes on RAB tariffs for regions that are already transferred to the RAB system. His expectations are based upon the approved business plans and the fact that loans for some companies have already been awarded in line with previously accepted RAB tariffs. Shvets said that he assumes no changes in the rates of return for new and old capital for those regions that will be transferred to RAB system on 1 January 2011, reported the press-centre of OTKRITIE Financial Corporation.

View: The announcements from Holding MRSK CEO Nikolay Shvets provide hope that there is some possibility for the company to avoid a reduction of RAB or lower RAB tariffs implied by the announced 2001 tariffs growth rate cap. Nevertheless, in view of recent delays, we do not expect positive reaction from investors, who will be more cautious now on the company and more likely to wait for further official announcements.

Valuation: Holding MRSK trades at an EV/RAB multiple of 0.47x, while the average for international peers is 1.32x.

Action: We find the news marginally positive for Holding MRSK shares and reiterate our BUY rating for the company. We see the decisions on tariffs in November-December 2010 as the next important catalyst for the stock.