Will the “Gazprom” to buy back their shares?

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The Board of Directors “Gazprom” has included in its agenda the issue “On prospects of the program of buyback of shares and global Depositary receipts PJSC “Gazprom”. Entering this very important market issue on the agenda of the meeting of the Council initiated by one of the independent Directors of the company, Timur Kulibayev. On this news shares of the gas giant added nearly 2.7% and cost 142,01 RUB.
From the point of view of the company, this investment is definitely a good idea. All fundamental indicators of the fair value of the shares of “Gazprom” much higher than current prices. And, from our point of view, the company may soon announce the appropriate program. However, the effect on capitalization will be limited. Hardly “Gazprom” will be able to spend a ransom amount could affect the capitalization of its free float. Gazprom is still forced to bear substantial investment costs. Besides, from the point of view of the budget, cash better to pay dividends than to repurchase shares. Also remains not quite clear question about whether the company can repay the purchased shares, or will leave on their balance sheets indefinitely. The latter, of course, undesirable.
Gazprom remains the cheapest Russian “blue chip”, unless, of course, not to consider “Surgutneftegaz” with its cash position of $34 billion Risks of weak corporate governance, the loss of the European market in favour of LNG to the us, the Ukrainian transit and the loss of export monopoly continues to beat on the capitalization of the company.
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Alexander Razuvayev,
The Director of analytical Department,
Alpari