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Federal Hydrogenerating Co JSC
Market Vectors Russia ETF
OAO RusHydro (HYDR) will pay dividends this year at least as high as in 2010 and may increase the payment by as much as 15 percent over the next three to five years, Deputy Chairman George Rizhinashvili said.
Russia’s largest hydropower producer, which is majority- owned by the government, paid shareholders 2.5 billion rubles ($84.7 million) in 2010, Rizhinashvili said. The future dividend policy will depend on the administration’s plan for selling part of its holdings, he said.
“We have an intention to pay a dividend of no less this year than last year,” Rizhinashvili said in an interview at a conference run by Russian lender VTB Group in New York yesterday. “We plan on increasing our dividends in the future compared with this year. The increase of 10 to 15 percent would be appropriate.”
RusHydro’s American depositary receipts (RSHYY) gained 2.6 percent in New York trading, the most since Feb. 24, as the Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. added 0.6 percent to 103.25 yesterday. Futures expiring in June on Russia’s dollar-denominated RTS Index fell 1.1 percent to 155,215 in U.S. trading.
The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, gained 1.2 percent to $29.98 yesterday. The RTS Volatility Index, which measures expected swings in the index futures, was little changed at 30.11 points in New York.
RusHydro’s ADRs have gained 16 percent this year in New York, compared with the 6.7 percent increase on Moscow’s 30- stock Micex Index. The U.S. stock trades for 8.3 times analysts’ estimated earnings, compared with an average valuation of 11.9 times for power and utilities companies on the MSCI Emerging Markets Index.
Prime Minister Vladimir Putin, who will return to Russia’s presidency for his third term in May, pledged in a Jan. 30 article in the Vedomosti newspaper to divest the government’s stakes in major non-commodity companies and to lower state holdings in some resource producers by 2016, excluding utilities and defense enterprises.
The government owned 60.38 percent of RusHydro as of March 31, 2012, according to the company’s website. Russia may start selling holdings in energy companies such as RusHydro this year, Economy Minister Elvira Nabiullina said in Moscow on March 29.
Should the price of the sale be a priority for the government, “it does make sense to look at a different timing, I’d say year 2013 would be a transition period in which it’s possible to consider selling a significant stake,” Rizhinashvili said. “The maximum price for the stake can be reached in a short-term perspective as well, when a certain model of privatization is used. There are different approaches towards it.”
RusHydro’s ADRs climbed to to $3.51 yesterday in New York, the first advance in four sessions. The stock added 2.8 percent to 1.05 rubles, or 4 U.S. cents, in Moscow yesterday, and RusHydro’s depositary receipts listed in London jumped 3.1 percent to $3.56.
Crude, Russia’s biggest export earner, lost 0.4 percent to $102.27 a barrel on the New York Mercantile Exchange yesterday, while Brent oil for June settlement gained 0.1 percent to $118 on the ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, rose 0.5 percent to $114.56.
VimpelCom Ltd. (VIP), the world’s sixth-largest wireless operator by subscribers, fell 0.9 percent to $10.20 in New York, the lowest level since Jan. 10.
Telenor ASA (TEL), the Nordic region’s largest phone company and the biggest shareholder in VimpelCom, said yesterday that it complied with Russian law in buying a stake in the company from Weather Investments II S.a.r.l., according to a statement.
The Russian Federal Antimonopoly Service filed a claim asking Telenor to return the 234 million VimpelCom preferred shares it bought from Weather for $374.4 million on Feb. 15, Telenor said, adding that it has not been formally notified of the claim.
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