Russian stocks fell the most in five weeks on speculation OAO Gazprom, the nation’s biggest company, will delay a plan to pay dividends based on international reporting standards, curbing the size of the payout.
The Micex Index (INDEXCF) decreased 1.2 percent, the largest retreat since Aug. 15, to 1,454.29 at the close in Moscow. Gazprom lost 1.6 percent to 143.35 rubles, the lowest since Sept. 13, on volume 1.1 times the three-month daily average. The stock was the biggest decliner by index points on the Micex. Polymetal International Plc slid 2.7 percent OAO Mechel (MTLR) sank 1.9 percent.
Gazprom rallied 32 percent last quarter amid speculation the company would start paying at least 25 percent of profit as dividends under international accounting methods starting from 2014. Some state companies won’t have to make the switch from Russian standards until 2016, Svetlana Nikitina, a Finance Ministry spokeswoman, said today, without naming the companies.
“One of the big hopes for Gazprom had been that it would pay high dividends,” Bruce Bower, a partner at Verno Capital in Moscow, which manages about $200 million in assets, said by phone. “So when investors get disappointed like this, this causes the stock to go down.”
The ministry is calling on state-run companies to increase payouts to at least 35 percent of profit as it seeks to boost government revenue. Its earnings from Gazprom and VTB Group dividends will almost double in 2016 from 2015, according to the draft budget on the parliament’s website.
Four stocks fell on the Micex for every one that rose today. OAO Alrosa soared 7 percent to 38.790 rubles after the world’s largest diamond miner said the Russian government and the Republic of Yakutia, in the country’s far east, would sell a combined 14 percent stake. Alrosa will also sell about 2 percent of treasury stock, with proceeds used to reduce debt, it said.
Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg. Shares on the Micex trade at 4.3 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index (RTSI$) fell 1.1 percent to 1,421.94.
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