Gazprom shares soar amid anticipated management changes

By Dina Khrennikova and Olga Voitova on 6/3/2019

MOSCOW (Bloomberg) -- Gazprom PJSC surged to a decade-high in Moscow trading on speculation the world’s largest natural-gas exporter will make more changes to senior management.

The shares rose as much as 17% to 251.65 rubles on Monday, the highest since August 2008. The stock has recently rallied on plans for higher dividends, while moves by CEO Alexey Miller to replace several long-serving lieutenants have prompted expectations of more hires and governance changes.

“Market speculation about new executive reshuffles and appointments at Gazprom are now moving the shares,” Andrey Polischuk, a Moscow-based energy analyst at Raiffeisenbank, said by phone. “The market hopes the new executives will increase the company’s efficiency.”

It’s a turnaround for a company that lost appeal in recent years as spending increased, dividend payouts disappointed and sanctions risks loomed. Last week, the gas producer heeded calls from investors -- and from the Russian government -- to boost shareholder returns, saying it will distribute as much as 50% of annual net income to shareholders in the “mid-term.”

The stock traded at 236.80 rubles, up 10%, as of 4:29 p.m. local time, making Gazprom the best performer on the MOEX Russia Index and cementing its position as Russia’s largest company by market capitalization. Its shares have risen more than 40% in the past month, after coasting for much of 2019.

Gazprom’s shares have been underweight “for years,” said Alexander Losev, CEO at Sputnik Asset Management.

That changed with the announcement of planned dividend growth, as “portfolio managers rushed to bring their Gazprom allocation to market-weight or even overweight, and so we have seen booming demand,” said Aleksei Potapov, head of the investment department at UFG Wealth Management Ltd.

Gazprom’s press service didn’t respond to requests for comment on potential management changes. The management board is scheduled to meet on Tuesday but the agenda will focus on the results of the winter season, Interfax reported, citing people it didn’t identify.

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