Page 69 - RusRPTFeb20

8.3.3 ​ ECM news
The change of government announced by Putin during his state of the nation speech on January 15 caused a brief blip in trading that corrected as soon as the new prime minister was announced. ​Investors base assumption was Putin will stay in power after 2024 and traders say that nothing has changed with that assumption so the long term investment case into Russia remains the same.
One of Russia’s largest real estate developers ​Etalon​ announced a $62mb buyback of up to 10% of its shares ​and updated its dividend policy in an effort to support shares price. The sees the minimum annual dividend payout of RUB12/share ($0.19) should Ebitda/Interest expense ratio be above 1.5x.
Russia's hydropower holding ​RusHydro​ is planning to request the Central Russian Bank (CBR) investigate its share performance ​from January 14 for any signs of manipulation. As reported by ​bne IntelliNews​, the shares of the Russian utility names are being closely watched by investors since the​ ​start of 2020 as strong Buy​. The shares of RusHydro jumped on January 14 following a report by the ​Kommersant d​ aily claiming that the government is considering spinning off the company's operations in the Far East​ as a state entity and making RusHydro a subsidiary of this new entity. But RusHydro refuted the report and called the claims "unreliable information". "We think that the company's official denial might trigger a correction following the considerable rise in the share price since January 14," Sberbank CIB commented on January 17.
Lukoil's BoD has approved the share tender offer results, treasury shares cancelled. ​The company completed the public tender offer to acquire 25 mln shares for subsequent cancellation (Lukoil's approach to cancel the treasury shares on the balance sheet bought via previous share buybacks). A report it published confirms that 22.1 mln shares were tendered, of which 21.8 mln were treasury shares held by Lukoil Securities Ltd, a 100% subsidiary of Lukoil. As a result, Lukoil's charter capital will be reduced to 692.9 mln common shares, while all of the remaining treasury shares will be canceled. An additional 0.4 mln shares will also be acquired from the market for $32 mln. The company will acquire the shares at a price of R5,300 per share (a 20% discount to the current market price), with payments to be made by February 7.
In an unusual week inflows into Russian equity took the lead over other EMs despite the big political changes announced by Russian President Vladimir Putin. ​Russia led EMs with inflow of 0.50% of sampled AUM in the week to January 15, according to EPFR Global data. This equated to $337mn, of, which $153mn was active country-dedicated money, $48mn was passive country-dedicated, $51mn active GEM, $40mn passive GEM and some $45mn via funds of other mandates. Among major events of the week, the last day of this reporting period coincided with the announcements of the government reshuffling and other policy proposals in President Vladimir Putin's annual address to the Federal Assembly. This is an unusual week, as EPFR Global data has typically shown Russia trailing EM peers, despite the market's strong outperformance over the past two years. Russia had not materially outperformed the overall EM/FM basket in proportional weekly flows since late September. Active Russia-dedicated funds as sampled by EPFR had not seen weekly absolute inflow this large since February 2017.
69​ RUSSIA Country Report​ February 2020 ​ ​www.intellinews.com