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Transneft Heads for Weekly Low on 2013 Investment Plan Concerns

November 23, 2012

OAO Transneft fell for the second day, heading for a one-week low, on concerns its investment program for next year will make higher dividends unlikely.

Transneft lost 0.7 percent to 62,599 rubles by 1:28 p.m. in Moscow, the lowest level on a closing basis since Nov. 16. The stock lost 2 percent yesterday. The amount of shares traded today was 4,534, equivalent to 39 percent of the three-month trading average. Thirty-day volatility climbed to 27.781, the highest since Oct. 24.

The board of Russia’s state-run oil pipeline operator approved an investment program for next year of 161.4 billion rubles ($5.2 billion), according to a statement yesterday on the company’s website. The plan exceeded expectations of analysts at Alfa Bank and VTB Capital, according to e-mailed notes.

“As higher capital expenditures reduces the chances of generous dividends going forward, we believe some market participants may prefer selling their Transneft holdings,” Alfa Bank analysts led by Alexander Kornilov, said in an e-mailed note.

Russia approved regulations requiring state companies to pay no less than 25 percent of their net income in dividends, according to a document posted on the government’s website on Nov. 16.

To contact the reporter on this story: Ksenia Galouchko in Moscow at

To contact the editor responsible for this story: Gavin Serkin at

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