State Treasury has mentioned KGHM as one of the companies, whose shares could be donated to the loss making Coalmine Holding (Kompania Weglowa, KW). ST, which holds 44% stake in KGHM at present, has mentioned that 1.5% of shares could be given to KW.
Our view: We view the news as neutral, as the increase in supply of shares is minor. Overall, we might see KGHM stake reduced to even 30%, without the state losing control over the copper company, due to dispersed free float. We reiterate our Buy rating for the stock, based on positive dividend outlook.