The Russian market is about to be hit by chunky inflows of cash from dividends and buybacks, $31 bln having been pledged as dividends by Russian corporates for 2011. A regulation implemented at end 2010 requires that dividends be paid to investors within 60 days of their approval at the AGM, which means dividends will be disbursed by summer’s end. Adjusted for free float, $31 bln in total translates into a $9.8 bln disbursement to portfolio investors in Russian stocks. In addition, Russian companies have announced another $11 bln in buyback programs. While the timeline of the dividend injection is no wider than the next three months, it will be an important supportive factor throughout the year, as cash disbursed to minority shareholders will be put to work in other Russian stocks. On our estimates, the total inflow from buybacks and dividends this year will be $21 bln - which, disbursed to minority shareholders, will provide a solid support for markets.
To put these numbers in perspective, dividend disbursements totaled $25.0 bln in 2011 and the free float portion was $7.0 bln; in 2010, these figures were $19.0 bln and $5.4 bln, respectively; and in 2008, they were $23.0 bln and just $6.6 bln. Thus, 2012 inflows from dividends are 48% higher than what we saw in the summer of 2008, and up 40% from last years’ total disbursements to free float shareholders.
Among the largest contributors to the dividend stream, Gazprom will disburse $7 bln in total dividends, including $2.8 bln to portfolio investors. TNK-BP will share $3.6 bln in total this year, including $186 mln to portfolio investors. Surgutneftegaz will pay out $1.6 bln to portfolio investors, Sberbank will pay $630 mln, Gazprom Neft $237 mln and Rosneft $152 mln.
Read more at BSR Russia