Page 15 - FSUOGM Week 05 2022

FSUOGM NEWS IN BRIEF FSUOGM

Russian equity market hit multi-year lows and never-ending hearings in international
thanks to the geopolitical crisis in Ukraine, arbitration tribunals.
some investors have already started to Moldova prepares audit of
"bottom fish" and buy low. Blue chip names
were also quick to buy back their own its debt to Gazprom, despite Orban says Hungary wants
shares.
BCS Global Markets wrote that in the Russia’s objections to buy more Russian natural
week ending January 26 Russian retail
investors showed high interest in the Moldova’s authorities have initiated gas
gas sector despite the media attention procedures to select a consultant to audit
on Russia’s so-called ‘gas weapon’ – a the debt owed by national transport, supply Europe is crippled by energy crisis, but
hypothetical situation in which Russia and distribution company Moldovagaz Hungary welcomes new contracts with gas
answers Western sanctions by limiting to Gazprom, estimated by the claimant at giant Gazprom signed in 2021, and wants
gas supplies to Europe – which BCS GM $700mn. to buy more Russian gas, Hungarian Prime
believes to be overblown. A letter sent by Gazprom to Moldovagaz, Minister Viktor Orban told President
For Gazprom, VTBC makes no changes a company where Gazprom holds the Vladimir Putin on February 1.
to the forecast for either operations or gas majority stake, and leaked to media shows “Taking into account the fact that
prices, keeping the conservative gas price that the Russian company at least has entire Europe is suffering from an energy
forecast of an average $299 per 1,000 cubic serious objections to the audit. The letter gas crisis, signing of the contracts (with
metres in 2022. The new 12-month target was initially interpreted by Moldovan Gazprom) was very important. We are
price for Gazprom shares is $4.1, implying authorities as a refusal but Moldovagaz head thankful for that, and I would like to
a 25% estimated total return, which Vadim Ceban claims that there are only increase the supplies during our meeting
underpins the upgrade to Buy. objections regarding the procedures. today,” he said.
"However, in order to reflect the The audit is part of the protocol agreed Putin said that the contracts with
increased geopolitical tensions, we have upon by Moldovagaz, Gazprom and the Gazprom that are valid until 2036 ensure
raised the country risk premium from 1.5% Moldovan government last November, reliability of gas supplies to Hungary.
to 3%," the analysts commented. when the natural gas supply was sealed for “Last year Gazprom signed two long-
The main risks to Gazprom's investment another five years. term contracts to sell Russian natural gas to
case stem from a further adverse The protocol envisages the evaluation Hungary until 2036. Reliability of supplies
intensification on the geopolitical front as of the claim, followed by negotiations for a is ensured,” he said, adding that the deals
well as a significant reduction in gas prices mutually agreed repayment calendar. The ensure that Hungary gets gas at a price five
globally, VTBC warns. protocol also stipulates that the audit should times below the current market price in
Before the market crash, in December be completed by the end of March. Europe.
2021, BCS Global Markets also The calendar is important because The energy sector is an important part of
had reiterated a Buy call on Gazprom and the Moldovan government agreed to the cooperation between Russia and Hungary.
maintained the name on the list of Top restructuring of Moldovagaz in line with Trade turnover between the two countries
Picks in the Russian Oil & Gas equity the unbundling principles of the third grew by 30% in January–November 2021,
universe. Driven by the European gas prices EU Energy package after the claim issue and large joint projects, and construction of
setting new records, the analysts increased is settled. Some have interpreted the a nuclear power plant, are going on. Energy
the target price for Gazprom's shares by provisions in the protocol as preventing supplies are stable, Putin said.
2%, making an estimated 47% excess return Moldogavaz’ unbundling until after the
with a 22% dividend yield anticipated in debt is repaid, and ambiguous formulations
2022. may indeed open the door to litigations

Week 05 02•February•2022 www. NEWSBASE .com P15