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bne Invest
June 21, 2019 www.intellinews.com I Page 12
Shares of Russian oil major Lukoil in BCG's most profitable top 10
The shares of Russian independent oil major Lukoil made it to the global top 10 of 2019 Value Creators Rankings by the Boston Consulting Group (BCG), bringing investors returns of 27.1% for the period of 2014 to 2018.
Three Russian companies made it to the top 50, with another private gas company Novatek (23.5% return) and Russia's largest bank state-controlled Sberbank (16.6%). The rankings are headed by Nvidia (54.4%), Broadcom (39.5%), Netflix (38.5%), Chinese Tencent Holdings (43.5%) and Kweichow (29.3%).
In the industry rankings of BCG Russian, diamond major Alrosa was fourth among the mining companies, while Evraz, Magnitogorsk Iron
and Steel Works (MMK) and Severstal were in the metals top 10 (3rd, 5th, and 10th, respectively).
Analysts surveyed by Vedomosti daily attributed the growth in Lukoil's share value to improved dividend policy and the share buyout programme launched last year. The company is seen
as generating strong cash flow at low leverage and capex, making a positive dividend outlook.
Russian stocks are doing well this year and the market has returned about 25% YTD – its best performance in a decade. However, Russian stocks are still heavily undervalued, despite the gains, as bne IntelliNews reported in “Why are Russian stocks so cheap?”
Russian bank profits soar 60% January-May to $14bn
Russian banking sector make an aggregate
net profit of RUB867bn ($13.8bn) in January- May 2019, according to the data released by the Central Bank of Russia (CBR) – an increase of 60% year-on-year from the RUB527bn posted for the same period of last year.
According to previous reports, in January-April 2019 Russian banks increased profits by 39.7% to RUB750bn, which makes the sector profit for May alone RUB117bn, which was below the RUB163bn posted for April.
However, the cumulative profits this year are still running ahead of any year in the last five when the economic crisis hurt the banking sector badly.
The CBR previously said that profitable credit organisations dominate the banking sector.
In May ruble deposits slipped by 0.3% versus 2.6% gain in April, while currency deposits inched by 0.5% after 0.5% decline in the previous month. The credit portfolio of the banking sector inched up by RUB65bn or 0.05%. The retail-crediting segment continued to outgrow the rest of the loans, expanding by 1.6% in May.
As reported by bne IntelliNews, most recently the World Bank (WB) and the Finance Ministry warned of con- sumer loans risks in Russia. The WB reportedly found that almost 60% of Russian's private borrowers have faced problems with servicing that debt.