Rus News Journal

Changes of recommendations

MDM - the bank has reconsidered recommendations on ADR Vympelcom and MTS. As a result the new target price of securities Vympelcom MTS - from $44 to $53 is raised from $55 to $76. The recommendation to buy remains without changes. Analysts have raised the forecast for both companies of indicator ARPU (an average monthly gain on one subscriber) on 5 - 9 % during 2006 - 2008 (i.e. from $6,5 to $7,1 on the average on the companies in 2006, from $6,8 to $7,4 in 2007 and from $7,3 to $7,7 in 2008). It should lead to growth of incomes on 8 - 20 %. Besides, according to analysts, in the long term MTS and Vympelcom will increase payments to shareholders either in the form of dividends, or in the form of the return repayment of actions. Both companies will have the big free monetary resources, and possibility of their investment for the purpose of absorption of new cellular actives decreases every year.
analyst IK Brokerkreditservis Rostislav Musienko ( Vympelcom - to buy , $70,8, MTS - to buy , $51,7) notice that after publications of the reporting following the results of a half-year in the market of these papers the calm is observed. However, in its opinion, for two weeks before the publication of results for the third quarter growth will renew on expectation of high indicators for this period . Besides, according to mister Musienko, to renewal of growth of quotations ADR Vympelcom conflict settlement between the basic shareholders Telenor and " should promote; the Alpha - groups . When two basic shareholders are at war, it negatively influences the company. At it the budget for 2006 and as such large company " can without it is not accepted even not; - the analyst underlines.

leading analyst IK Veles the Capital Ilya Fedotov ( Vympelcom - to buy , $62,03, MTS - to buy $51,08) considers that leaving from the company of old management and arrival new became one of the cores the factor of growth of MTS: From May, 2005 till May, 2006 the company did not show growth. When Leonid Melamed (the former head of insurance company ROSNO became its head. - ), it managed to return interest of investors to the company . Results of the third quarter which will reflect changes ARPU in the conditions of free entering calls become One more factor influencing cost of both companies. The analyst agrees that in Vympelcom a deterrent is the conflict of shareholders. However, according to Ilya Fedotova, as a result of this conflict at first Telenor, and then ` the Alpha - groups ` declared the repayment of actions in the market that increases speculative demand .

This material has exclusively information character and cannot be considered as the invitation or prompting to get or sell securities