Gazprom Shares Soar as Investors Expect Management Changes

(Bloomberg) -- Gazprom PJSC surged to a decade-high in Moscow 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 Chief Executive Officer 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 returns, saying it will distribute as much as 50% of annual net income to shareholders in the “mid-term.”

Gazprom Shares Soar as Investors Expect Management Changes

After reacting positively to Gazprom’s dividend plans last week, today "the market has started to price in further potential changes in corporate governance," analysts at VTB Capital said in emailed note.

The stock traded at 236.98 rubles, up 10.2%, as of 6:31 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, chief executive officer 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 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.

©2019 Bloomberg L.P.

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