Page 112 - RusRPTJan23

8.3.2 Dividends dynamics
Russia yield exceeds 10%, among highest in 2022. On our estimates, the IMOEX index currently offers a 10.2% dividend yield expected over the next 12 months. This is one of the largest figures in 2022, as certainty over expected dividend payment on specific company levels has improved in the past few months. That was primarily due to the strong dividends coming or proposed by large index heavyweights, primarily Lukoil and Gazprom. Focus on investment appeal to domestic retail, forget EMs. Not only does this dividend yield look among the highest this year, but also does it highlight that the popular high-dividend narrative is still applicable to the Russian equity case. It is hard to overestimate the importance of high actual cash dividends remaining in place for the market to maintain its attractiveness vs other asset classes available to the Russian retail investors. We sense that the real competition has shifted away from comparing Russian stocks to those from other major world equity markets on various characteristics, including expected dividends and yields. Since it is the local retail investor that is canned inside Russia and remains the only real investor in town, the competition with other asset classes and investment instruments available to retail has become key. However, to keep the relevant perspective in sight, we again highlight that the dividend yields even of the most underpriced EMs remain below those of Russia. Namely, Turkey, a top 2022 performer, offers 2023e DY below 4%, while consensus sees the 12MF yield for the neighboring Kazakhstan market at 7.8% next year. The Eastern European neighbors Poland and Czech Republic suggest 4.6% and 8.8% 2023e DYs. It is only Brazil that can compare to Russia on DYs as consensus expects 2023e DY of 7.9% after the record 12.2% expected for the entire 2022.
● Oil & gas
The shareholders of Russian oil company Lukoil have approved paying 256 rubles per common share in dividends for January–September and 537 rubles per share in dividends from the net profit undistributed in 2021, the company said in a statement on December 5. The record date is slated for December 21.
● Banks
Sber announced a return to profit in 4Q22 and CEO German Gref said the bank may resume paying dividends in 2023.
● Metal & Mining
MMK is not planning on paying dividends yet, Interfax reports citing CEO Viktor Rashnikov in December. The company would not return to dividends at this stage, Rashnikov noted, recalling the current restrictions on payments to non-resident shareholders. He also stated that it will be possible to return to the issue of dividends if geopolitical conditions change.
The board of Russian metals major NLMK (Novolipetsk Steel) recommended a RUB2.6/share dividend for 9M22, the company
112 RUSSIA Country Report January 2023 www.intellinews.com