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8.3.2 Dividends dynamics
The dividend theme remains a critical theme for the Russian market,
especially given the relatively weak growth prospects for the economy overall or for the growth part of the market, albeit the latter is increasing with the recent and announced placements of the IT companies in Moscow.
While Russia has been an inexpensive market for years, it is the unlocking of the dividend potential that should allow investors to finally benefit from this undervaluation as dividends are real cash and not just an argument or a high accounting profit number buried in the financial statements.
While 2020 clearly did not help to increase dividends for the market, given the 48% expected slump in the overall net profit, 2021 should be more rewarding. Accordingly, bankers do not expect significant yields from most Oil&Gas names or cyclical banks to be paid on the 12MF basis, but rather in 2022 on the back of higher profits in 2021.
Nevertheless, there are plenty of high-dividend names even in the extreme setting of the 2020 recession and pandemic.
Dividends increasingly matter in recent years. It is past the previous recession of 2015-16 that investors have started to reward companies with best dividend practices more. That comes as the government looking for dividends from SOEs to make budget ends meet. Also, anemic economic growth has created a perfect case for the high-dividend yield environment.
● Retail
98 RUSSIA Country Report February 2021 www.intellinews.com
