Page 93 - RusRPTNov19

yield for shareholders of 11-12% (including a 5-6% dividend yield). On our FCF estimates, the company could buy back another $9bn of shares by the end of 2021.
The board of Russian mobile major Mobile TeleSystems (MTS) ended months of speculations on its possible freefloat structure and decided to maintain its American Depository Receipts (ADRs) on the New York Stock Exchange (NYSE) along with the domestic listing on the Moscow Exchange (MOEX).
The shares of Russian fourth largest oil producer Surgutneftegaz (Surgut) leaped by a third (31%) in value between October 23 and October 25 and setting a new all time high price record of RUB48 ($0.75), with no apparent catalysts or news flow. This is the second big jump up in the stock’s value this year. As reported by bne IntelliNews, in September the stock jumped some 20% shares as speculations piled into the name on reports that the oil "dinosaur" known for its ultra-conservative financial policies may unseal its notorious $50bn cash pile, which is almost as much as Russia’s sovereign reserves. Analysts surveyed by RBC business portal and Kommersant daily were scratching their heads as they saw no apparent reason for last weeks second rally in Surgut shares. According to previous unconfirmed reports, the company previously announced the creation of the subsidiary, Rion, to invest in and manage securities. By the end of 1H19, Surgut's cash pile had reached more RUB3.25 trillion ($50.9bn), which is 2.4-fold more than the entire company’s market capitalisation. The cash the company holds is being discounted by 50 cents on the dollar as investors believe the management will never share these funds with shareholders. Surgut famously bases its operations on rubles, and its investment case has been loosing its dividend appeal owing to the ruble's appreciation and Russia's tight fiscal policy. In effect the way the company’s dividends are calculated mean its preferred shares are a hedge against the fall of the ruble against the dollar, as if the ruble falls in value the company’s dividend payout goes up in proportion. However, any move that potentially gives investors access to the $50bn cash pile would vastly improve the interest in the name.
The shares of Russian metals major Norilsk Nickel jumped by 6% in Moscow and London on October 28 upon the announcement of the expected exports ban of nickel ore from Indonesia, the company's capitalisation reaching
93 RUSSIA Country Report November 2019 www.intellinews.o