Page 72 - RusRPTOct19

Surgutneftegas HOLD 30.8 0.7 2.30% 5.53
NOVATEK HOLD 1,306 27.6 2.10% 13.3
Rusagro - 724 13.4 1.80% 0.09
Source: Bloomberg, BCS GM
8.3.3 ECM news
CIS Natural Resources Fund, a JV between Interros and Grigory Berezkin's ESN Group, plans to sell part of its 36.66% stake in Bystrinsky during the company's IPO. ESN Group CEO Boris Krasnovsky said the IPO is likely to take place in London or Hong Kong in 2020 once the project reaches full capacity. He said that weak copper prices should not be an obstacle to the IPO, since the project provides diversified commodity exposure, as it also produces gold (which is at its highest level in several years) and iron ore. The terms of the deal have yet to be finalized.
Russian multi-industry investment consortium AFK Sistema plans to buy back RUB3bn ($47mn) worth of its shares from the Moscow Exchange through to February 2020 for the management motivation programme, Vedomosti daily reported on September 17 citing the representatives of Sistema. The capitalisation of Sistema jumped on the announcement by 6.84% to RUB128bn in Moscow. The respective RUB3bn buyback would make about 2.3% of shares. Sistema also pledged to leave leverage unaffected by the buyback, with the net debt amounting to RUB218bn as of 2Q19. Vedomosti reminds that telecom major Rostelecom and Yandex internet major also recently instituted management equity motivation plans. Sistema's capitalisation in Moscow recovered from the dive to RUb74bn on MOEX in October 2018 after a painful legal battle with Russia's largest oil company state-controlled Rosneft. From October 2018 the capitalisation on London Stock Exchange increased by 68% to $1.9bn. In 2Q19 under IFRS Sistema posted 9.6% y/y revenue growth to RUB196bn ($3bn), attributed to performance to all of its major assets MTS mobile major, Detsky Mir children’s goods retailer, Agroholding Steppe, Medsi private healthcare and Segezha Group timber and paper producer. Adjusted OIBDA grew by 1.3% y/y in 2Q19.
Russia's non-state pension funds (NPF) increased their investment of pension savings into corporate bonds by 3.9 percentage points (pp) to 51.6% as of end 2Q19, Vedomosti daily reported on September 20 citing the data by the Central Bank of Russia (CBR). The share of corporate bonds expanded on the account of declining in sovereign securities, which the CBR attributed to continuous increase in spreads between the two. The total investment portfolio of the NPFs exceeded RUB4 trillion ($62.5bn) as of end of reporting period, increasing by 2.6% quarter-on-quarter. The growth was investment-driven, as the average yield on investing the funds amounted to 10.4% for NPFs and 8.4% for state development bank VEB.RF (former Vnesheconombank). The number of NPF participants remained the same at 6.2mn people. NPFs paid RUB34.7bn in pensions in the reporting 2Q19, up by
72 RUSSIA Country Report October 2019 ww.intellinews.com