During the May holidays, the price of shares of JSC Lenenergo fell significantly. Brokers attribute this not only to the decreased activity of the stock market, but also to the fact that RAO UES of Russia cannot decide on the option of restructuring its subsidiary.
The price of transactions with ordinary shares of Lenenergo on the RTS stock exchange fell to $0.36, which is already 30% less than the March maximum for these securities. Preferred shares fell less, from $0.29 to $0.25.
Mikhail Grigoriev, an analyst at the Lenstroymaterialy brokerage firm, believes that the fall in Lenenergo shares is due to the fact that the option for reforming the company, favorable for minority shareholders and prepared with their participation, may not be accepted exactly in the form in which they expected. “When it became clear that Lenenergo was facing difficulties in approving its own option in RAO UES, which suited investors, prices naturally adjusted. In March, the market simply overestimated the likelihood that Lenenergo management would be able to defend its option in RAO in original form,” says Mikhail Grigoriev.
His brother Sergei Grigoriev, who works as a trader at the rival investment company Energocapital, also calls the unresolved issue of restructuring a strong negative factor for Lenenergo shares. At the same time, he assesses the company’s shares sharply positively: “For 2002, the company has planned a profit of 1.6 billion rubles. This is 60% more than last year. My recommendation for the securities is strong buy (confident buy - Kommersant), and “I regard the fall in Lenenergo shares as a play by a number of short sellers in order to buy shares cheaper.”
Brokers claim that Lenenergo shareholders are simply tired of waiting for the reform option to become clear. At first, the energy sector was going to publish the final version of the restructuring by mid-February, then by March. The market then waited for clarity to come to the board of directors on April 12th. Now the choice of option is delayed, apparently, until the fall. At the same time, investors do not particularly like the probable restructuring option. “Until it becomes clear what exactly, when and how will happen to the current share of Lenenergo during the reform of the company, the demand for them will remain reduced,” says Mikhail Grigoriev.
Investors also see another negative factor for the Lenenergo stock market. “It’s very annoying that some people on the market know a lot about Lenenergo, while others know almost nothing. In the last few months, almost any information about Lenenergo was already known on the market by the time it was officially published and was reflected in prices.” , says one of the brokers.
For example, information about high dividends on Lenenergo shares became publicly available after April 3, the date the company’s shareholder register was closed. But at the end of March, shares on the market rose, as if buyers knew about the upcoming payments (by July 22, the company will first pay 33.24 kopecks per ordinary share and 76.53 kopecks per preferred share).
OLEG ANISIMOV.

Newspaper "Kommersant St. Petersburg" No. 79 dated May 14, 2002, p. 2

Lenenergo shares did not wait for reforms