Artio's funds trim down investments in Russia, bank stakes reduced on worries of state interference
MOSCOW. Jan 10 (Interfax) - Funds under the management of Artio Global Investors, one of the leading foreign portfolio firms on the Russian market, for the quarter ending October 31, sharply reduced its investments in Russian stocks.
As of July 31, Artio International Equity Fund and Artio International Equity Fund II held over $1.1 billion in Russian corporate stock. At the start of November, this figure had more than halved to $485 million, the fund said in a report. This was partially driven by overall market decline over this period but the bulk of the reduction has been the result of share sales.
For instance, the funds fully sold their stakes in NOVATEK (at the end of the previous quarter, the funds owned 1.43 million shares and 238,000 GDRs worth a combined $57 million) and Rosneft (17.3 million GDR worth $146 million).
In addition, Artio reduced its stake in VTB , in which it owned around 0.7% (36.7 GDRs worth $218 million) at the start of August. The two funds now own 12.5 million GDRs in VTB worth $59 million (at the start of November).
The most valuable investment in Artio's Russian portfolio still remains stock in Sberbank (60 million shares worth $163 million). The packet had decreased from 92.1 million shares worth almost $340 million at the start of the quarter.
On of Artio's leading investments remains OHSC Pharmstandard where the two funds jointly own just under 5%. This share packet is now worth around $130 million.
In a report for investors, Artio said that shares in eastern European and Russian banks (where the company has traditionally given preference because of high concentration, profitability, and options for development of the financial sector in the region) have suffered because of the debt crisis in the Eurozone. "In addition, there has been the additional negative influence of unforeseen state interference in operations in the interests of consumers. In the case of one Russian bank, where the fund owns shares, the government inspired the acquisition of an ailing bank while a major Austrian bank with operations in Eastern Europe was forced by the authorities to change mortgage agreements in Swiss francs in order to reduce the burden for borrowers,' the report said.