Page 4 - FSUOGM Week 46 2019

FSUOGM COMMENTARY FSUOGM
Gazprom widens lead as Russia’s most valuable company
Gazprom’s share price has benefited from the risk of new US sanctions receding, sustained high dividend payouts and a mild economic recovery
RUSSIA
STATE-OWNED gas company Gazprom extended its lead over rival state-owned banking giant Sberbank in the stakes to be Russia’s most valuable company, after its market capitalisation stepped up by over $10bn in October to make the company worth $93.1bn as of the start of November. Sberbank’s market cap rose on the month by $4bn to a total of $82.1bn, putting it into second place.
Russian stocks are having a banner year as investors return to the Russian equity market and are currently overweight. As bne IntelliNews reported, the Russian stock market is currently the best performing in the world, with the MSCI (Russia) index up 44% year to date, dol- lar denominated Russia Trading System (RTS) index up 34.4% YTD and the ruble denomi- nated MOEX Russia Index up 23.3% YTD as of November 14.
A variety of factors have gone into lifting the index, apart from a so-called Santa Rally that happens every year in the last quarter. Chief amongst the positive factors is receding fears of new and harsh US sanctions, growing corporate earnings, sustained high dividend payouts and a mild economic recovery.
However, Gazprom’s stock has had an even better year, storming passed Sberbank to become the king of the castle in June when its share price jumped some 30% in a day after the management unexpectedly doubled the com- pany’s dividend payout, lifting its market cap to $82bn in the process.
So far this year Gazprom’s shares have earned investors a 72% return as of November 14 against Sberbank’s, still very respectable, 39%, which is also better than the 33% the publically traded financial sector as a whole has returned and
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w w w . N E W S B A S E . c o m Week 46 20•November•2019