Those who want to make money on Gazprom collapsed its value.
Shares of the most important player on the Russian stock market - Gazprom - collapsed by more than 20% on Monday. The Russian stock market followed, too, flew down. All this is explained by the fact that Gazprom is preparing to pay out record dividends in its history. And naturally, there were more people who wanted to run into the last car and become a shareholder of the company. Will Gazprom be able to return to the previous value?
On Monday, immediately with the start of trading, Gazprom's shares began to fall by 30%. It was possible to stop this collapse due to the announcement of the Moscow Exchange from 10.15 Moscow time of a discrete auction for Gazprom shares.
The main reason is the dividend cutoff. What it is? It is worth clarifying that on September 30, the shareholders' meeting approved the decision to pay record dividends for the first half of 2022 - 51.3 rubles per share. This is about 26% of the closing price of the evening session of the Moscow Exchange on Friday. We are talking about the payment of 1.208 trillion rubles.
An important question is who exactly will receive the dividends. “The dividend cutoff is the date by which you need to buy a company's shares in order to be included in the shareholder register and receive the right to pay dividends from the company,” explains Vladimir Chernov, an analyst at Freedom Finance Global. In the case of Gazprom, the deadline for buying shares to receive dividends was Friday 7 October, and the final list of shareholders will be drawn up on 11 October when the register closes.
It is logical that many tried to buy Gazprom shares on Friday just to get into the number of shareholders who received dividend payments.
“And after getting into the register, shares are most often disposed of, since dividend payments are already guaranteed for these securities, and investors shift investments into other securities. That is why, after the dividend cutoff, stocks usually become cheaper by the amount of the dividends themselves. This is exactly what happened this time, only with a dividend yield of 26%, Gazprom shares at a minimum fell by 29%,” says Chernov.
That is, it was the closing of the register of shareholders that collapsed the company's shares, and this happens absolutely always, the expert adds.
But will Gazprom's quotes return to their previous values? Gazprom shares began to recover in the afternoon, and they even managed to offset part of the morning's decline. However, it will be difficult for Gazprom to return to Friday's figures.
“Sometimes quotes rise to their previous values within a month, and sometimes they continue to decline, everything will depend on the future prospects of the company itself. I believe that the recovery of Gazprom shares to their previous values may be delayed.
It is quite possible that the dividend gap (the gap between the closing price of Friday, October 7 and the opening of trading on October 10) will not be closed this year,” Chernov believes.
The precedent set for blowing up two Nord Streams, attempts of sabotage by Ukraine against the Turkish Stream and the terrorist attack on the Crimean bridge only exacerbate the geopolitical situation.
“Unless there is a significant improvement in the geopolitical situation, it will be difficult for Gazprom shares to close the dividend gap in the coming months. The company is suffering from the loss of the European market, an increase in the tax burden and a rather slow reorientation to China. Due to these factors, dividends for the second half of the year may amount to 10-15 rubles per share, and for 2023 - 10-20 rubles, which, in our opinion, is not attractive enough for a quick recovery in quotations, ”expects Sergey Kaufman, analyst FG "Finam".
Simultaneously with the geopolitical events, news came that the Swiss subsidiary of Gazprombank was curtailing all operations in this country. Switzerland purchases gas from export sites in Germany, France, the Netherlands and Italy. However, the risks of non-payment are not yet discussed.
“The curtailment of the Swiss subsidiary, in our opinion, will not affect gas exports in any way. In order to have problems with paying for gas supplies, it is necessary to disconnect Gazprombank from SWIFT. But even if this measure is applied to pay for gas supplies, we believe that a special exception will be made - it makes no sense for the EU to shoot itself in the foot in this way, ”says Kaufman. Rather, the EU will have problems not with payment, but with a physical shortage of gas in winter, he believes.
It is worth noting the influence of Gazprom on the entire Russian stock market. Gazprom shares make up about 15% of the Moscow Exchange index, so their decline has affected the entire market.
“Gazprom is the most important player in the Russian stock market, as it is the leader of the Russian stock market in terms of capitalization – at the beginning of September 2022, it grew to $102 billion. In previous years, its shares in investors' portfolios could reach 40–50% of the entire portfolio, so its influence on the market itself is great, and stock indices react most of all to changes in Gazprom's share prices,” says Chernov.
By the close of the main trading session, the Moscow Exchange Index showed a decrease of 1.43%, to 1916.97 points, the RTS dollar index - by 4.1%, to 963.88 points.