Bloomberg News

Gazprom Rises on Addition to UBS Key Call Emerging-Markets List

May 25, 2012

May 25 (Bloomberg) -- OAO Gazprom climbed for a second day, adding to its first weekly increase in 11 weeks, after UBS AG put the stock on its “Key Call” emerging-markets list following a dividend increase.

Gazprom rose 0.6 percent to 142.97 rubles by close of trading in Moscow, after adding as much as 1.5 percent earlier, bringing its weekly increase to 3.2 percent, the most since February.

The company’s board recommended on May 22 that shareholders approve a 2011 dividend payment of 8.97 rubles a share, compared with 3.85 rubles a share for 2010.

“The increase in Gazprom’s dividend payout to 25 percent is unlikely to be a one-off, in our view, because it was driven by the government,” UBS analysts led by Maxim Moshkov said in an e-mailed report. “We estimate the company will have the highest 2012-13 dividend yield among global oil and gas names of comparable size and market cap.”

UBS cited “attractive valuations and dividend yield,” “robust balance sheet,” and “improved control over cash operating expenditure” as reasons for adding Gazprom to the “Key Call” list.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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