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June 21, 2019 www.intellinews.com I Page 2
Russia's dividend season open and investors prepared for record payouts
increased its dividend twice in a week and effectively doubled the payout to RUB16.6 per share. The stock jumped 40% in value in a matter of days to make Gazprom once again the most valuable company in Russia. The management followed up to say that the new dividend level was a floor and that it expects to increase the amount of profits it shares with investors from the current 27% to 50% probably by next year. The big change is that now investors believe it will happen.
Gazprom’s decision also pushed up the overall dividend distribution for this year, which reached an all-time high of RUB2.9 trillion (or $45.4bn, up RUB514bn on VTBC estimates). Between now and the end of the year Russian public companies will hand over a whopping RUB2.4 trillion ($37.6bn) to investors.
Despite the record payments, the RTS payout ratio declined to 37%, mostly on technical factors, breaking the upward trend seen since 2011. However, the dividend payout ratio for this financial year is expected to recover to 42%, says VTBC.
While equities are still not exciting investors and emerging market funds pulled $150mn out of the market (mostly due to selling by exchange-traded funds) the equity story continues to improve. The rally in Gazprom shares was part of a broader rally in equity prices this year that has lifted the returns in all the main sectors. The leading RTS index is now back to its 2014 levels and has returned a healthy 26% YTD as of the time of writing, making Russia the second best performing equity market in the world after Greece.
Russian Market Data Value
1M YTD
Equity Indices
RTSI
1,391
11%
30.1
MOEX
2,780
8%
17.3
MSCI EM
1,054
6%
9.0%
S&P
2,954
4%
19.0%
NASDAQ
8,051
5%
22.0%
DAX
12,355
3%
17.0%
FTSE
7,424
2%
10.0%
Commodities
Price, $
1M YTD
Brent
64.7
-10%
19%
WTI
56.7
-10%
25%
Urals
74.2
-4%
65%
Gold
1,388
9%
8%
Silver
15.4
7%
0%
Nickel
12,240
3%
15%
Copper
5,962
0%
0%
Aluminum
1,777
0%
-5%
FOREX
Value
Russia sectors performance % YTD
1M YTD
EUR/RUB
70.98
-2%
-10%
Russia sectors performance % YTD
Oil & Gas Utilities Financials Consumers Telecoms
M&M RTS MOEX
43 29
28
30.1 17.3
16
20
0 10 20 30 40 50
24
Source: MOEX, BCS GM
source: MOEX, BCS GM
Meantime, foreign investment coming into the
Sectors: % return YTD