Novatek Biggest Micex Gainer on Buyback Extension: Moscow Mover

OAO Novatek advanced the most on Russia’s benchmark stock index as the nation’s second-biggest natural-gas producer prolonged its share buyback program until next year.

The stock increased as much as 2.6 percent before trading 1.4 percent higher at 324.27 rubles by 1:31 p.m. in Moscow. The amount of shares traded was equivalent to about 65 percent of the three-month daily average, according to data compiled by Bloomberg. Global depositary receipts surged 2.5 percent to $113.10 in London. Novatek has the seventh-biggest weighting out of 50 companies on the Micex, which fell 0.3 percent today.

The company extended its share buyback program to June 7, 2014, it said in a regulatory statement today. Novatek said in June it would buy back as much as $600 million of stock within the next 12 months. The stock purchased under the program may be used for financing operations or in employee compensation and incentive programs, Novatek said that month.

“The fact that the company is buying stock is positive,” Oleg Maximov, an analyst at Sberbank CIB, said by phone from Moscow. “So far they have bought back quite a small stake, about 10 percent.”

As of May 27, 5,517,510 ordinary shares, including those in the form of GDRs, have been bought on the open market as part of the program, Novatek said today. The stock has declined 6.3 percent this year, compared with a 17 percent drop for OAO Gazprom, Russia’s biggest company and natural gas export monopoly, and a decrease of 7.8 percent for the Micex.

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