Stock market review

International indices FUTSEE 100, Hang Seng, NASDAQ 100, N225JAP and Russian MICEX in January – December 2013 (according to the data from the exchanges).

In 2013 the Russian stock market demonstrated a sideways trend. Stock markets in USA and Japan showed a reverse situation – continuous upward movements throughout the year. In 2013 FUTSEE 100, NASDAQ 100 and N225JAP have grown up by 4%, 29% and 34% correspondingly, while MICEX and Hang Seng have lost 6% and 7%.

On the whole, a broad view on the Russian stock market demonstrates that a sideways trend lasts for over 2 years. During 2013 Russian economy showed no uplifts. Since the stock market is a partial reflection of the economy, there is no place for long-term bullish trend on the market. Therefore, investment activity on the Russian stock market stays low and large foreign investors show a very weak interest towards Russian shares.

The Company’s shares vs MICEX and MICEX PWR indices in 2013.

During 2013 MICEX PWR decreased by almost 40%. Quotes of the majority of Russian utilities also dropped down due to the impact of a sector negative background. According to the data from Thomson One, foreign portfolio investments in the sector lowered down to 1.5% of overall investments in Russia by the end of 2013. Analyst coverage and “buy” recommendations on the sector were also considerably reduced. The key reason for such a negative attitude to sector shares is regular changes of rules of play:

  • RAB reboot resulting in the loss of RAB status for a number of companies and review of RAB parameters for others;
  • 2014 tariff freeze;
  • eview of investment programs, etc.

Investors also fear to invest in the sector due to the risk of dilution of interest from possible additional share issues to finance investment programs as well as low TSR (total shareholder return) due to no or small dividends and limited quote growth.

During 2013 the Company’s quotes had a bearish trend. In 1Q 2013 the Company has successfully placed its debut RUR 3 bln. commercial papers. Also during the year mass media occasionally wrote on a possible privatization of several subsidiary companies of Russian Grids that facilitated the quotes of grid sector companies.

According to the data from MICEX overall trading volume of the Company’s shares totaled RUR 394.2 mln. or 2 603.2 mln. shares (as of 2012 - RUR 1 002.3 mln. and 4 869.0 mln. shares). As of 2013 the market capitalization of the Company totaled RUR 5.6 bln. (as of 2012 – RUR 18.4 bln.).

  2012 2013
Trading volume, RUR mln. 1 002.3 394.2
Trading volume, mln. shares 4 869.0 2 603.2
Number of transactions 15 291 10 264
Minimal annual price, RUR 0.1405 0.054
Maximum annual price, RUR 0.2646 0.241
Average weighted price at the year-end, RUR 0.21071 0.0635
Market capitalization at the year-end, RUR 18 420 729 034.45 5 550 961 537.79