Russia’s Gazprom shares hit 10-year high on dividend policy proposal

June 3, 2019

MOSCOW (Reuters) – Shares in Russia’s Gazprom reached a 10-year high on Monday after the state gas pipeline monopoly said it planned to increase its dividend ratio to 50% of net profit.

At 1210 GMT, Gazprom shares were up 9.6% at 236.2 rubles ($3.62) per share, having climbed to 251.65 rubles, their highest since August 2008.

At its peak on Monday, Gazprom’s stock has risen 64% so far this year.

Gazprom said last week that its dividend payout ratio would rise to 50% of net profit under International Financial Reporting Standards in two to three years. Gazprom plans to approve the dividend policy this year.

On Monday, Sberbank CIB, the investment banking unit of Russia’s top lender Sberbank, changed its recommendation on Gazprom shares to ‘Buy’, expecting the proposed dividend policy changes to boost Gazprom’s shares.

“In our view, this is drastically changing the company’s investment attractiveness,” Sberbank CIB said in a note.

Alfa Bank analysts said that Gazprom ‘remains the hot topic as the market speculates on top management changes and an ambitious restructuring plan that may push share prices to 300 rubles.’

Earlier this year, Gazprom replaced three executives responsible for exports, domestic market and production.

Sergei Kupriyanov, spokesman for Gazprom, asked if any changes should be expected at a board meeting as soon as on Tuesday, said: “We will hold a management board tomorrow on how we coped with the heating season. It happens every year.”

(Reporting by Katya Golubkova, editing by Louise Heavens)

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