CSN shares to split into three

Brazilian flat steelmaker CSN (NYSE: SID) will split its stock into three to increase the liquidity of its paper, the company announced last week. One analyst, who preferred to remain anonymous, said the material impact of the split will be negligible but "psychologically" the move will increase liquidity. CSN's stock price jumped over four times in value over the past year due to recovery in investor confidence in Brazil and robust steel prices. But since the company has posted its 2003 results on Mar. 9, share prices have fallen some 9.7%, or from a high of US$72/share to current trading of US$64.55/share. Initially, analysts said the fall in price came from lower-than-expected fourth quarter results. Despite posting a net profit of 1.03bn reais (US$358mn) for the year - up from a loss in 2002 - earnings in the 4Q03 amounted to 315mn reais, 17% lower than 4Q02 income of 380mn reais. Exacerbating the situation is partial flight from all of Brazil's companies due to security concerns after the Madrid bombings on March 11. The analyst who spoke to BNamericas said that with slightly depressed prices for assets in Brazil now would be a good time to purchase shares. Rio de Janeiro-based CSN has a 5.8Mt/y crude steelmaking capacity.