NEW YORK, Oct. 16, 2015 (GLOBE NEWSWIRE) -- Russia! magazine reports that according to the survey of top analysts who track Russian market, Western institutional investors are likely to continue closing their positions in Russia due to lack of predictability of the economy and continued lack of protection of minority shareholders rights.
The survey of 24 top Russian analysts was conducted by Russia!, an online and print publication that reports on Russian business, politics and culture. Over 50% of analysts who took part in the survey in October acknowledged lack of protection of minority shareholders’ rights and lack of institutions that should be there to protect them.
“Minority shareholding in this country is not a secure position. It’s not uncommon for companies to completely ignore minority shareholders, even in case of public companies,” says Michael Thompson, Russia’s contributing editor. One of the cases mentioned by the analysts — Uralkali, a Russian-based potash giant, abruptly decided to halt dividends last year and is considering delisting its shares from London Stock Exchange — an unusual move by a company that has been public for a long time and is quite popular with the investors. “Delisting and other actions taken by Uralkali and other large Russian public companies are often not in line with minority shareholders’ voice and might put additional pressure on Western investors,” adds Thompson.
The report by Russia! magazine quotes Ivan Bokov, who tracks Russian equity since 1996: “Uralkali seems to have decided to delist and is in the aggressive buy-back mode, and it’s not in its best interest to show that is doing well,” says Ivan Bokov, “Dividends are a major factor for minority shareholders whose livelihood depends on them. As soon as the consistent flow of money has been cut off, minority shareholders are affectively forced to sell at a price that might not be very fair. Going private for a large public company is always lowering disclosure requirements. I even can image that it can be good for the company. But it’s almost always a blow for minority shareholders,” adds Bokov.
Russia! magazine is an independent print and online publication reporting on culture and business and other things that happen in this country. You can find recent coverage of this and other topics on Russia! magazine website, www.readrussia.com.
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