The revival of the Russian investment opportunity underpinned by strong dividend-paying stocks opines Renaissance Capital
Below are some highlights from Renaissance Capital
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The Russian market has outpaced the MSCI Emerging Market index over the past three months, having jumped approximately a tenth in dollar terms.
Many have interpreted the recent reappearance of Russian IPOs as a clear indication of the Russian market coming back to life; last week, En+ Group, the aluminium and power company, listed on the London Stock Exchange, whilst Obuv Rossii and Polyus also held notable listings earlier in the year. Many analysts have predicted that this trend of IPOs may continue into 2018, as international investors warm to the idea of Russian equity investment after several challenging years.
However, another key aspect of the attractiveness of Russian companies may lie in their dividend pay-outs, where Russia remains a global leader – the MSCI Russia index was trading with an average dividend yield of 5% as of the start of November – double that of the broader MSCI EM index, which stood at 2.3%.
According to Renaissance Capital, the Russian market is the cheapest among Emerging Markets in absolute terms (12M FWD P/E of 6.5x) and has the highest dividend yield of any major EM.
Amongst those listed in London, En+ Group announced in October 2017 that it has approved the payment of USD $125mn in interim dividends to shareholders in December 2017, while it was recently reported that Evraz, the metals and mining company, has paid its first dividend in three years
Please see below for a selection of the top 12-month dividend expectations amongst Russian companies.
| Russian 12 month dividend expectations >5% |
|
| Stock |
Price, RUB/s |
12MF DY |
| Enel Russia |
1.3 |
11.2% |
| Severstal |
911 |
10.9% |
| Rostelecom pref. |
53 |
9.7% |
| Norilsk Nickel (DR) |
1,126 |
9.6% |
| NLMK |
134 |
9.5% |
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