Page 89 - RusRPTApr20

while his reported net worth was $300,000. Following the IPO, Tinkov expatriated from the US, but now could face up to six years in prison for the alleged tax fraud. US citizens that give up their citizenship have to pay an “exit tax” based on their net worth at the time.
Russian AFK Sistema extended its share buyback programme from February 2020 to December 2020, without disclosing other parameters. As reported by bne IntelliNews, the multi-industry investment conglomerate plans to buy back RUB3bn ($47mn) worth of its shares or about 2.3% of share capital from the Moscow Exchange from September 2019 through to February 2020 for the management motivation programme. As February 2020, Sistema's wholly-owned subsidiary had repurchased 120.6mn shares for an aggregate of RUB1.6bn. “The extension of share buyback program means on- going support for Sistema stock price particularly in periods of negative market environment,” Alfa Bank commented on February 2, estimating that the remaining RUB1.4bn program volume corresponds to 0.9% of Sistema market capitalization and 2.6% of free float value. Alfa analysts also note that under this program Sistema was actively purchasing its stock from the market in September and October 2019 with total 94mn shares repurchased at RUB12.2-14.6 per share, seeing the news as positive for the stock in the short term. Most recently analysts have affirmed the investment case and boosted the valuation of Sistema’s asset e-commerce platform Ozon, as well as children’s goods retailer Detsky Mir and MTS mobile major.
8.4 International ratings
Russia - Rating agency
as of January 1, 2020
last change
Moodys (USD rating)
Baa3 (S)
02/08/19
Fitch (USD rating)
BBB (N)
09/08/19
S&P
BBB- (S)
23/02/18
Fitch Ratings lowered Russia's GDP growth outlook downwards from 2% to 1% in 2020, on a mixture of global risk factors, such as economic slowdown in China, global recession, the collapse of oil prices, and ruble devaluation. The agency sees Russian exports and domestic demand as compromised.
As analysts struggle to catch up with the coronavirus (COVID-19) meltdown and update outlooks, Fitch revision seems already outdated and overly positive. As reported by bne IntelliNews, domestic analysts believe that Russia will not be immune to recession this year, projecting an economic decline in the range of 1%-2.7%.
Fitch still expects state spending to resume in 2H20, and help restart economic growth. However, the ability of the government to maintain the pro-growth spending agenda largely depends on the magnitude of the anti-crisis stimulus that will have to be rolled out.
The agency sees inflation accelerating to 4.3% in 2020, above the Central Bank of Russia (CBR) target of 4% due to ruble devaluation. The CBR last week itself admitted that inflation is likely to breach the targets this year, as it
89 RUSSIA Country Report April 2020 www.intellinews.com