‘The decision of Chelyabinsk Tube-Rolling Plant’s shareholders to pass a dividend for 2006 may have been caused by their wish to reinvest the profits in order to get better dividends in the future. If the shareholders choose to reinvest, they thus declare that their company has some excellent investment opportunities, but the ROE (return on equity) coefficient of Chelyabinsk Tube-Rolling Plant does not look like it. It’s actually lower than the average figures in this branch,’ maintains Vsevolod Chaschin of Blagodat Securities Investment Company.

The Board of Directors of Chelyabinsk Tube-Rolling Plant suggested on March 18, 2007 that the general shareholder meeting should result in the decision to pass a dividend for 2006, says the company’s official report produced on March 21, 2007 in compliance with the obligatory reporting of information that could influence a company’s stock price or affect its investment activity.

‘The passing of dividends may lead to ROE and price stock growth, so the owners might be trying to raise the stock price prior to IPO. They could also be attempting to reinvest in the plant in case investors are not interested; or, additional finances could be needed for a large-scale investment project or for the introduction of a breakthrough technology,’ Mr. Chaschin said.