Banc of America thinks MMK shares good for investment

27 April 2009 (10:00)

Banc of America Securities - Merrill Lynch has recently resumed looking into Severstal, Magnitogorsk Iron & Steel Works (MMK), and Novolipetsk Iron & Steel Works (NLMK)’s performance, Interfax reports.

According to the bank’s analysts Eduard Faritov, Stanislav Gorozhankin, and Jason Fairclough, MMK’s shares are most investor-attractive at the moment, so they suggest buying those.

At the same time, Severstal’s shares had better be sold, and NLMK’s shares would be better off when put on a shelf for a while.

‘The loss of Severstal’s U.S.-based assets has affected the company’s overall financial performance badly; what is more, the company does not benefit from the dropping raw steel prices because they are using their own stuffs,’ the report states.

MMK, on the contrary, is likely to lower its production costs through decreased raw material prices. Besides, this company’s debts are quite moderate,’ the experts say.

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