Page 15 - FSUOGM Week 37

FSUOGM INVESTMENT FSUOGM

Rosneft oil maintains strong

buyback activity

RUSSIA THE buyback activity of Russian state-con- rising political tensions and oil falling from $46
trolled oil major Rosneft remained elevated on per barrel at the start of September to about $40
Rosneft promised the week ending September 11, with about 1mn per barrel, BCS GM analysts argue.
a major buyback shares bought on average daily, BCS Global Mar- Overall, "the ramp-up of the buyback
programme in its 2018 kets wrote on September 15 citing the date dis- does not appear so much to have led to
investor pledges. closed by the country's largest crude producer to outperformance for Rosneft versus its Rus-
the London Stock Exchange (LSE). sian oil & gas peers, but rather kept it in the
As followed by bne IntelliNews, the analysts middle of the pack," BCS GM notes, while
previously welcomed the buyback of Rosneft, as maintaining the Buy recommendation on
it is seen as maintaining investor interest despite the name.
the rising political and geopolitical pressure on Such a situation would have been unlikely in
Russian equities. a declining market due to the stock’s traditionally
"Rosneft’s buyback activities continue at an relatively high beta to the overall market, BCS
elevated pace, confirming they are structured to GM believes.
provide support during times of market weak- As reported by bne IntelliNews, a massive
ness," BCS GM wrote, seeing the news as positive share buyback programme was part of Rosneft's
for the name. 2018 investment makeover, when it pledged
The buying algorithms used by the manager to cut debt, rein in its investment programme
of Rosneft’s buyback have apparently been trig- and shed non-profitable assets. The company
gered by the weakness in the overall Russian also raised its dividend payout to 50% of IFRS
market, which has come under pressure due to profit.™

POLICY

Russian energy official

charged with graft

RUSSIA A Russian deputy energy minister has been Ryzhkov, and the vice-presidents of a company
charged with embezzling over RUB603mn called Lanit, Vladimir Makarov and Viktor Ser-
A number of senior ($8mn) in state funds, the Russian Investigative ebryakov, were also involved in the scheme and
officials have been Committee reported on September 9. have been detained, the Committee said.
arrested in recent years, Anatoly Tikhonov, one of eight deputies serv- In early July a deputy education minister,
as part of Putin's public ing under Russian Energy Minister Alexander Marina Lukashevich, was also arrested on sus-
commitment to clamp Novak, took the position in July last year. He was picion of embezzling RUB40mn.
down on graft. well acquainted with Novak, according to RBC, Corruption is endemic in Russia and several
with the two men both working as deputies ministers, vice-ministers and other senior offi-
under the governor of the Krasnoyarsk region cials have been arrested in recent years, as part of
up until 2008. President Vladimir Putin’s public commitment
Tikhonov stands accused of siphoning off to clamp down on graft. But critics say such
funds designated for the development of an IT arrests are used to punish or threaten those that
system. A total of RUB968mn was allocated for have fallen foul of rivals in Russia’s power circles.
the project, meaning he allegedly took over 60%. Former Economy Minister Alexei Ulyukayev
Kommersant wrote that the theft took place was jailed for bribery in 2017. He was caught tak-
between 2013 and 2015. ing a $2mn bribe in a sting operation undertaken
The official was detained after interrogation by FSB in the previous year at the headquarters of
on September 8. The Investigative Committee Rosneft. Ulyukayev, who was sentenced to eight
and the FSB raided the offices of several Energy years in a labour colony, claims he was set up for
Ministry officials last week, according to Rus- opposing Rosneft’s acquisition of mid-sized oil
sian media reports. Tikhonov’s advisor Roman producer Bashneft. ™

Week 37 16•September•2020 www. NEWSBASE .com P15