Shareholding structure and Securities Market Overview
As of the end of 2012, the registered share capital of the Company was 49,946,843,800 rubles and consisted of 49,946,843,800 shares, each with a par value of 1 ruble, including 47,871,694,416 ordinary shares and 2,075,149,384 preference shares.
Ordinary shares:
State registration number: 1-01-55385-Е.
Registration date of the issue and securities issue report: July 29, 2008; Order of the Federal Financial Markets Service of the Russian Federation No. 08-1731/pz-i;
Quantity of issued shares: 41,041,753,984.
Additional share issues:
- State registration number: 1-01-55385-E-001D;
Registration date of the issue: May 6, 2010; Order of the Federal Financial Markets Service of the Russian Federation No. 10-1221/pz-i;
Registration date of the securities issue report: February 3, 2011; Order of the Federal Financial Markets Service of the Russian Federation No. 11-194/pz-i;
Placed shares: 1,922,313,097;
Individual issue code 001D was canceled on May 19, 2011.
- State registration number: 1-01-55385-E-002D;
Registration date of the issue: November 10, 2011; Order of the Federal Financial Markets Service of the Russian Federation No. 11-3021/pz-i;
Registration date of the securities issue report: May 24, 2012; Order of the Federal Financial Markets Service of the Russian Federation No. 12-1301/pz-i;
Placed shares: 4,907,627,335;
Individual issue code 002D was canceled on September 13, 2012.
- State registration number: 1-01-55385-E-003D;
Registration date of the issue: December 3, 2012; Order of the Federal Financial Markets Service of the Russian Federation No. 12-2993/pz-i;
Quantity of issued shares: 16,885,114,442;
As of the end of 2012, the placement of the issue was not complete.
Preference shares:
- State registration number: 2-01-55385-Е;
Registration date of the issue and securities issue report: July 29, 2008; Order of the Federal Financial Markets Service of the Russian Federation No. 08-1731/pz-i;
Quantity of issued shares: 2,075,149,384.
SHARE CAPITAL STRUCTURE
QUANTITY OF THE COMPANY’S SHARES OWNED BY THE GOVERNMENT:
| As of December 31, 2012 | Quantity of Shares | Percentage ofShare Capital, % | |
|---|---|---|---|
| Ordinary Shares | Preference Shares | ||
| Federal Agency for State Property Management | 27,083,623,028 | 145,523,224 | 54.52 |
PRINCIPAL SHAREHOLDERS OF THE COMPANY (AS OF DECEMBER 31, 2012):
| Percentage of Share Capital, % | |
|---|---|
| The Russian Federation represented by the Federal Agency for State Property Management | 54.52 |
| National Settlement Depository (nominee shareholder) | 17.03 |
| Depository and Corporate Technologies (nominee shareholder) | 15.79 |
SHAREHOLDERS OWNING MORE THAN 5% OF ORDINARY SHARES IN THE COMPANY (AS OF DECEMBER 31, 2012):
SHAREHOLDERS OWNING MORE THAN 2% OF ORDINARY SHARES IN THE COMPANY (AS OF OCTOBER 8, 2012):
| Name | Percentage of Share Capital |
|---|---|
| Federal property | 54.52 |
| Gazprom Finance B.V. | 5.13 |
| Gazprom Energoholding | 3.93 |
| Rusenergo Fund Limited | 4.18 |
| Index of Energy – FGC UES | 2.77 |
| Neft-Aktiv | 3.18 |
| MMC Norilsk Nickel | 3.04 |
RESIDENT AND NONRESIDENT SHAREHOLDERS OF THE COMPANY (AS OF OCTOBER 8, 2012):
| Residents | Nonresidents | |||
|---|---|---|---|---|
| Qty | Percentage of Share Capital | Qty | Percentage of Share Capital | |
| Federal property | 54.52% | |||
| Corporate entities | 1,767 | 19.24% | 486 | 22.06% |
| Individuals | 317,012 | 4.173% | 396 | 0.007% |
SHARE MARKET IN 2012
Positive changes in the global stock markets in 2012 were mainly determined by active steps taken by the world’s biggest central banks to stimulate the global economy. For instance, the ECB and the People’s Bank of China lowered their interest rates, the ECB announced its willingness to buy unlimited quantities of eurozone government bonds, the US Federal Reserve launched a new quantitative easing program, and the Bank of England and the Bank of Japan expanded their programs of buying assets. Another positive factor for the markets was the settlement of the Greece issue: the second bailout tranche received by Greece and the reform carried out by the country’s government averted the threat of Greece’s exiting the euro area.
Overall, the MSCI World grew by 13.2%, while the MSCI Emerging Markets went up by 15.1% in 2012.
The Russian market closed the year worse than the developed and developing stock markets. The MICEX Index went up by 5.2% in 2012. The Russian market was under pressure from weak crude oil prices, which rose by 3.5% in 2012, and the deterioration of the Russian economy’s prospects.
CHANGES IN SHARE PRICES OF RUSSIAN ELECTRIC UTILITIES
The MICEX Power Index (MICEX PWR) lost 16.8% in 2012, demonstrating a bigger decline than the overall market for the second year in a row amid continuing regulatory pressure and a high level of uncertainty about the sector’s development prospects. The most important of the factors affecting the market changes in 2012 are as follows:
- In January, the Ministry of Energy agreed with energy companies to freeze electricity prices, including free prices at the December 2011 level;
- In April, the Prime Minister stated that it was necessary to continue the policy of keeping down the tariffs of “natural monopolies, infrastructural monopolies, and government-linked companies”;
- In May, the President signed two decrees, including FGC UES, RusHydro, and the Company on the list of strategic companies and granting Rosneftegaz the right to buy privatized companies of the fuel and energy sector;
- In June, President signed the decree to appoint a special commission on the strategic development of Russia’s fuel and energy sector. The commission was in charge of dealing with the sector’s strategic issues, while the governmental commission on the fuel and energy sector continued to address operational issues;
- In November, the Ministry of Economic Development put forward proposals to substantially limit monopoly tariffs starting from 2016 in order to ensure the competitiveness of industrial production as part of preparing the forecast of Russia’s socioeconomic development for the period until 2030;
- Decree of President of the Russian Federation was signed in November which specifies renaming Holding MRSK into JSC Russian Grids and that the Russian Federation’s contribution to the authorized capital of JSC Russian Grids will be federally owned shares in JSC FGC UES as payment for additional shares to be placed by JSC Russian Grids in connection with an increase in its authorized capital while the Russian Federation will retain its stake of at least one share in the authorized capital JSC FGC UES.
Therefore, securities of the sector’s companies were under pressure from regulatory and political decisions in 2012.
The total market capitalization of Interregional and Regional Distribution Grid Companies (IDGCs/DGCs) in 2012 decreased by only 0.8%. the Company’s market cap went down by 4.6%. Changes in these indicators were worse than changes in the MICEX Index but better than changes in the MICEX Power Index.
CHANGES IN MARKET CAPITALIZATION OF DISTRIBUTION GRID COMPANIES IN 2012:
| Item | Name |
Market Cap Indicators | The Company’s Share | ||||
|---|---|---|---|---|---|---|---|
| as at Dec. 30, 2011 (billion rubles) | as at Dec. 28, 2012 (billion rubles) | YoY Change | Sectoral Share | Percentage of Share Capital | Value (billion rubles) | ||
| 1 | MOESK | 85,106 | 73,470 | -13.67% | 24.69% | 50.90% | 37,396 |
| 2 | LENENERGO | 11,139 | 9,139 | -17.96% | 3.07% | 49.36% | 4,000 |
| 3 | IDGC of Volga | 15,849 | 13,361 | -15.70% | 4.49% | 67.63% | 9,036 |
| 4 | IDGC of Northern Caucasus | 1,515 | 1,463 | -3.46% | 0.49% | 78.01% | 1,141 |
| 5 | IDGC of North-West | 7,477 | 6,116 | -18.20% | 2.06% | 55.38% | 3,387 |
| 6 | IDGC of Siberia | 10,603 | 8,440 | -20.40% | 2.84% | 55.59% | 4,692 |
| 7 | IDGC of Urals | 17,442 | 18,421 | 5.61% | 6.19% | 51.52% | 9,490 |
| 8 | IDGC of Centre | 25,153 | 24,626 | -2.10% | 8.28% | 50.23% | 12,370 |
| 9 | IDGC of Center and Volga Region | 16,581 | 19,363 | 16.77% | 6.51% | 50.40% | 9,759 |
| 10 | IDGC of South | 3,284 | 2,591 | -21.09% | 0.87% | 51.66% | 1,339 |
| Total for IDGCs | 194,150 | 176,990 | -8.84% | 59.49% | 92,610 | ||
| 11 | Kubanenergo | 6,855 | 21,866 | 218.96% | 7.35% | 63.01% | 13,778 |
| 12 | TDC | 1,508 | 2,136 | 41.70% | 0.72% | 52.03% | 1,180 |
| Total for IDGCs/DGCs | 202,513 | 200,992 | -0.75% | 67.55% | 107,568 | ||
| The Company | 101,237 | 96,536 | -4.64% | 32.45% | |||
| Total for the sector | 303,750 | 297,527 | -2.05% | 100.00% | |||
At the end of 2012, the market capitalization of distribution companies was 297.5 billion rubles, demonstrating a small decrease of 2.1% as compared with 2011.
The volatility of the Company shares in 2012 determined a wide range of changes in the premium/discount value of the Company’s market cap in relation to the total market capitalization of the Company’s stakes in IDGCs traded on the Moscow Exchange. The year 2012 closed with a more than 10% discount: shares in IDGCs nourished expectations about the pilot deals aimed at reducing the Company’s stakes in distribution grid companies in 2013.
In 2012, shares in distribution grid companies were included in the calculation of the following indices:
LIQUIDITY INDICATORS OF TRADED SHARES IN DISTRIBUTION GRID COMPANIES IN 2012
In the case of shares in most IDGCs in 2012, the average daily number of deals in the sector was down (by 11% on average) whereas this number in the case of ordinary shares in the Company grew almost twofold (+97%). The largest number of deals in the reporting period was shown by shares in IDGC of Northern Caucasus and MOESK; and the smallest number, by ordinary shares in IDGC of North-West and IDGC of Siberia. The sector’s largest average daily number of deals took place in September 2012.
As in the previous year, ordinary shares in the Company had the smallest average daily spread in the distribution sector; however, this indicator decreased by 9.6%.
The ruble-denominated average daily turnover of ordinary shares in of the Company rose by 64%.
The average yearly free float turnover of ordinary shares in the Company substantially increased from 168% to 352%.
FORECASTS OF INVESTMENT COMPANIES ABOUT THE COMPANY’S SHARES
At the end of 2012, almost all prediction estimates related to ordinary shares in the Company were in excess of the market value of the securities. Investment analysts continue to be optimistic over the prospects of shares in both the Company and the distribution sector as a whole.
According to industry analysts, the key drivers of the growth of distribution companies in 2013 will be as follows:
- There will be certainty about the consolidation of electric grid companies and the sector’s strategy;
- Final tariff decisions will be made;
- The prospect of the privatization of distribution companies will take shape.