Translated material
Reputation is more valuable
VTB suspended trading in controversial shares
The second day of trading in VTB shares on the MICEX began with the fact that trading in securities was stopped again. This time by order of the issuer himself. The bank's management appealed to the stock exchange with a request to suspend trading in the main issue of shares. Transactions with these securities on the MICEX will not be carried out until the end of August. Market participants believe that VTB's decision is related to the bank's desire to avoid reputational risk.The confusion with the state bank's shares began on Monday , when in just two and a half hours the price of the main issue securities (owned by the state and the “old” minority shareholders) suddenly increased by more than one and a half times. Then the MICEX stopped trading until the end of the day, promising to understand the situation why these securities, which in theory should not be traded at all, increased in price so much. At the same time, additional issue securities purchased by investors during the May initial offering were traded normally. In addition, yesterday this incident attracted the attention of the regulator: the Federal Financial Markets Service also announced that it intends to analyze the current situation.
According to AK Bars analyst Polina Lazich, “the suspension of trading in shares of the main issue puts investors who bought these shares in a very unenviable position - if the shares are not traded before they are combined with an additional issue, then investors may receive a net loss. At the same time, it is possible that the Federal Financial Markets Service, upon identifying the fact of price manipulation, will provide such investors with the opportunity to cancel transactions.” The analyst considers the issuer’s actions justified: “This incident, and even on the first day of trading, could have left a bad taste in the minds of investors. And this is not in the interests of VTB. Therefore, in order to avoid a repetition of the situation, the bank simply stopped trading in this issue.”
The shares of the additional issue were traded as usual on both the MICEX and the RTS. Following the market, which showed negative dynamics yesterday, prices for the bank's securities decreased. During the day they fell in price by 1.48% - to 13.9 kopecks on the MICEX and by 0.55%, to $0.0054 on the RTS. Yesterday's closing price of shares was 2.2% higher than the offering price. “The whole market looks very bad now, all the blue chips are getting cheaper. Against the backdrop of general sales, VTB shares are also falling in price, notes Troika Dialog trader Alexey Dolgikh. “It’s hard to say whether the quotes will fall below the placement price: it all depends on the further movement of the market.” Alexander Nikolaev, head of the securities department of the Bank of Moscow, shares a similar opinion: “Nothing extraordinary is happening with VTB securities: they are falling following the market. It does not appear that the shares were artificially supported by the placement organizers. Since the security is potentially strong, it is unlikely that it will be sold en masse, even if the market falls further.”
During the initial public offering, VTB “rejected” 6.4% of the population’s applications. Deputy Chairman of the Board of VTB-24 Bank Irina Busheva spoke about this yesterday on Echo of Moscow. “In total, 140 thousand applications were submitted from individuals, of which about 131 thousand were satisfied. Some people (3.3%) did not pay for the applications, the rest were filled out with errors,” a source familiar to the Interfax-AFI agency clarified with the progress of placement.