Shutterstock photo
Markets

Renault gets an OK to buy AvtoVAZ

Shutterstock photo

Shutterstock photo

U.S. traders who have been frustrated with the lack of easy access to Russia's leading car maker just got a bit of extremely bittersweet news from Vladimir Putin himself.

Putin has reportedly given French car manufacturer Renault (thinly traded in ADR form as RNSDF ) permission to raise its 25% stake in AvtoVAZ (extremely thinly traded as AVTZF ) to at least 50%.

On the one hand RNSDF is a much more liquid ADR than AVTZF, which technically has not moved a single share since early August. But that is still relatively cold comfort for traders who want a truly active stock in order to manage their risk while getting their taste of Russia's biggest native car company.

Moscow brokerage firm Troika has about 20% of AvtoVAZ that it could sell at the right price, while state-owned Russian Technologies could cough up the rest.

Renault partner Nissan (NSANY ) could emerge as a net buyer of AvtoVAZ shares in its own right.

AvtoVAZ has raised its sales by a spectacular 40% so far this year, with only around 40% of its total output going into Russia's version of the "cash for clunkers" subsidy program. In October alone, the company boosted its sales of Ladas and other models by roughly 70% on a year-over-year basis.

Right now, RNSDF seems to be the best way U.S. investors can fight their way into that growth story.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks