Page 106 - RusRPTSept22

Many clients who attended meetings with the management of VTB, Otkritie and Alfa still cannot get details from the organisations about what exactly happened in March with their shares. Throughout the spring, people remained hopeful that they would be able to access their papers after they were translated. And brokers did not dissuade them. VTB, in a press release on the completion of the transfer of securities to other brokers dated April 18, assured that these securities "are not encumbered, are not" blocked "on any accounts and are available for transactions." In fact, at that time, clients could no longer sell their foreign securities, and the transfer of shares to other brokers did not change this situation.
VTB, in response to an inquiry from The Bell, stated that “the transfer of clients has nothing to do with the issue of blocking NSD in Euroclear. In March, when clients transferred their assets from VTB, NSD was not under blocking sanctions, and switching to non-sanctioned brokers significantly increased their chances of being able to manage their investments.” On June 3, NSD nevertheless fell under EU sanctions - and now investors can no longer count on an early unfreezing of assets worth 320bn rubles. Lawyers and consultants interviewed by The Bell name three options for further action: an unpredictably long wait for the sanctions to be lifted; try to sell frozen shares on the over-the-counter market (in practice, there is currently neither an organised process for such a sale, nor real buyers); try to sue brokers, the exchange or Euroclear (but lawyers evaluate the prospects
8.3.2 Dividends dynamics
● Oil & gas
The board of Russia’s second-largest gas producer Novatek recommended to pay RUB45/share dividends for 1H22. As covered by bne IntelliNews, as the fallout from Russia’s military invasion spread in 2Q22, a cascade of dividend cancellations from Russia’s largest blue chips followed, with that of gas giant Gazprom hurting local investors the most. The first company in the oil and gas sector to announce a post-Ukraine invasion dividend was regional oil major Tatneft. The fact that Novatek stuck to interim dividend payments is another positive sign for the oil and gas sector dividend outlook, Sberbank CUB analysts argued, estimating that the recommended dividend implies 4% yield. For BCS Global Markets, while the dividend announcement was expected, “the most positive news is that the dividend policy remains in place, which could not be taken for granted after Gazprom’s refusal to pay its own 2021 dividend”. Sberbank CIB maintains a positive outlook on Novatek's full-year performance and anticipates a final dividend for 2022 of up to RUB120 per share (an 11% yield).
Gazprom announced its first-ever interim dividend on August 30 of Rb51.03/sh: Per CFO Famil Sadygov, this represents 50% of adjusted net income under IFRS for 1H22 (as yet unpublished), the company’s existing dividend policy. He added that management intends to stick to this dividend policy going forward in its recommendations to the company’s BoD.
The background – an investment case undermined by the 2021 dividend rejection: When Gazprom’s AGM unexpectedly refused the BoD’s
106 RUSSIA Country Report September 2022 www.intellinews.com