X5 Retail Group, the largest Russian retail operator that unites the Pyaterochka, Karusel, Perekrestok chains, as well as convenience stores under other brands, announced the withdrawal from February 1 of its shares to the Moscow Stock Exchange. Previously, X5 was quoted only on the London Stock Exchange (LON: LSE).
The reasons for this decision, as well as whether delisting is possible on the LSE, the company representatives refuse to talk before the start of trading in Moscow. Interviewed by Investing.com representatives of other major Russian retail chains also do not want to comment on the actions of the competitor.
“The presence of the Russian rating can help expand the investor base – many Russian investors have the opportunity to invest in securities only if there is a Russian listing. In addition, the Russian listing may allow the shares to enter the MSCI index calculation base, which is also important for many foreign funds and, as practice shows, it allows to increase the company’s capitalization. This is the right step, although a bit belated, – believes analyst Aton \ Viktor Dima. – We are not talking about an additional placement – on the Moscow Stock Exchange will be issued already issued shares in the form of GDR. Accordingly, delisting on the LSE is unlikely: rather, the real price will be set on the LSE for at least a year or two, as this will be the main liquidity center. And, most likely, this is just a coincidence and what is happening is not related to the decrease in the stock price of Magnit (MCX: MGNT) and the delisting of the Dixy network (MCX: DIXY). ”
At the same time on the eve of the main trader of one of the largest investment companies noted that many funds to maintain the “weighting” you need to have in your portfolio at least something from the retail sector. Until recently, Magnit was the favorite, but recently it shows poor reporting, and the third largest player, Dixie, is talking about delisting. Accordingly, the absolute favorite in the sector is X5, and this is just a convenient moment to ensure the representation of its securities at all necessary sites.
The stock price of X5 on the LSE on January 25 fell from $ 40.5 to $ 38.7. After the announcement of an exit on the Moscow Stock Exchange, the stocks returned to their previous level, but never reached their maximum on January 11, when they were worth $ 43.7. The historical maximum of prices for these shares was observed in September 2017, when their quotes at times exceeded $ 45.