Member Info for manfor

“was really close to buying JRS but then I realised those banks won't be able to expand and return to Europe, so their damage is much more permanent than these commodity miners. I also expect the oil and gas price to fall after ceasefire, so the upside from the energy component of that portfolio isn't huge either (2x at most). Poly and Evraz though have an easier path to recovery to prewar valuations.”

Have to disagree. There are many diversification benefits with JRS. A single company like Poly can have a disaster but JRS holds many companies that are on very low PE ratios. It is already down from £9 to £1 and when the war is over it should be a fairly quick rise back to about £4.

Can anyone explain this latest RNS for the ten largest holdings? Gazprom is now only about 1% of the total holding and it was about 20% on 28th February. JRS had over 15 million Gazprom shares in February, so have these 15 million Gazprom shares all been sold? I thought selling by foreigners was not allowed at present?

Poly and POG both in bullish mood and looking good.
Not too sure about JRS

JRS Russia could easily be a 5 bagger when the war ends. It is down about 90% to £1 because of the war, and it should go back to about £5 when the war ends.

It could easily be back at £6 within the next few weeks. JRS has also fallen from £9 to £1 and so it could easily be back at £4 soon.

“If Russia wanted to never ever allow a sale by a foreigner and capital flows out of its country, could it do this? Maybe it could. Could or would JRS do much about this if it happened, I doubt it.“

So can JRS not do anything else to help realise the true value now? Can they not transfer the trust to a “friendly” country that will allow them to sell at true value? I assume they cannot transfer the assets to a Russian entity, but can they not transfer the assets to a Chinese or Hong Kong company, or any of the other many countries that are dealing normally with Russia.

Rob

So one stock is worth 36 times the current 'fair value' of the Moex portfolio and over twice the entire portfolio? Is that right?

Yes that is right. The JRS valuations are all complete nonsense. The correct fair net asset value for a Moex/Russian investor buying the shares today is about £3.50. I don’t understand why Russian investors are paying £3.50 for their Moex shares, when they could be buying the same JRS shares on the London stock exchange for £1.

listing as at close of business 28th February 2022

Holding Security Description Market Value % of Fund Security No.

15,491,328.000 GAZPROM 28,497,725.51 23.34% 4364928
16,810,961.000 SBERBANK OF RUSSIA 15,276,667.79 12.51% B56CB23
624,696.000 LUKOIL 14,140,543.81 11.58% 4560588
71,192.000 MMC NORILSK NICKEL PJSC COMMON STOCK RUB 1 9,829,942.20 8.05% 7131431
3,719,692.000 ROSNEFT OIL CO 7,614,060.08 6.24% B17KP48
842,766.000 HALYK SAVINGS BANK OF KAZAKHSTAN JSC GDR USD 6,356,468.87 5.21% B1KDG41
230,421.000 NOVATEK PJSC GDR USD 4,503,360.05 3.69% B0DK750
97,567.000 JSC KASPI.KZ GDR-REG S 4,362,973.83 3.57% BMXZ8G7
180,877.000 MAGNIT PJSC COMMON STOCK RUB 0.01 3,965,441.81 3.25% B1393X4
1,301,425.000 TATNEFT PJSC 3,153,905.52 2.58% 5452208
6,156,103.000 ROSTELECOM PJSC COMMON STOCK RUB 0.0025 3,022,430.68 2.48% 5004148
21,233,273,216.000 VTB BANK PJSC COMMON STOCK RUB 0.01 2,957,228.89 2.42% B1WMD67
169,819.000 YANDEX NV COMMON STOCK USD 0.01 2,399,678.27 1.97% B5BSZB3
4,003,270.000 DETSKY MIR PJSC COMMON STOCK RUB 0.0004 2,388,286.55 1.96% BYM4171
59,546.000 POLYUS PJSC GDR 2,383,171.43 1.95% BYXL3S6
4,198,000.000 UNITED CO RUSAL INTERNATIONAL PJSC COMMON STOCK HKD 0.656517 2,190,289.06 1.79% BNGCVV8
552,780.000 SEVERSTAL PAO GDR USD 2,121,719.44 1.74% B1G4YH7
365,735.000 NOVOLIPETSK STEEL PJSC GDR USD 2,094,781.85 1.72% B0RTNX3
65,502.000 NAC KAZATOMPROM JSC 1,432,818.14 1.17% BGXQL36
12,313,057.000 SISTEMA PJSFC COMMON STOCK RUB 0.09 1,101,095.21 0.90% B06K6Y9
432,517.000 MD MEDICAL GROUP INVESTMENTS PLC GDR USD 967,058.71 0.79% B8JZ5X9
75,226.000 TCS GROUP HOLDING PLC GDR 545,742.42 0.45% BF233S0
275,182.000 X5 RETAIL GROUP NV GDR USD 1 543,903.62 0.45% B07T3T9
577,525.000 FIX PRICE GROUP LTD GDR 241,038.95 0.20% BN30342

Total portfolio 122,090,332.69 100.00%


It looks from this like the full holding of 15 million Gazprom is in Moex shares. If it is GDR or ADR it will say it. Over 80% of the total portfolio value seem to be in Moex shares. So a total portfolio value of £120 million gives assets per share of £3. When the war is over it will be nearer £5. And in two years it will be nearer £10. So it is just a matter of waiting.

The prices JRS are using now are simply absurd nonsense. Russian investors are buying Gazprom on the Moex today for over £2 a share, and JRS have 15 million Gazprom shares and they are saying they are worthless. It is all nonsense.

In today’s RNS it says thatJRS are valuing their Moex shares at 5% and their GDRs at less than 1% ! Why are JRS using a valuation of only 5% for their Moex equities that are trading on the Moex today for 100% ? Why are they using such an absurd low figure? Why not value them at 95% as it is much closer to the real figure? Or even 50% if they want to be very cautious. Where do they get 5% from?

And it says they own 15.4 million Gazprom shares at 28th February. Last time I looked at the holdings they had over 16 million Gazprom. How has the holding reduced? Have JRS been selling any of their holdings since the start of the war?

If these are trading at a 75% discount to the underlying shares on the Moex, is it just a matter of time before they return to the same Moex price of £5 ? What are the risks, if there are any, of this not happening?

There is always wild talk about nationalisation and appropriation but is there any real basis for this? Has any government ever actually stolen the shares of foreign investors? There is no talk for example that UK might steal the shares of ordinary Russian investors who may own LSE shares such as Tesco and Lloyds. They may take the assets of the oligarchs with ties to Putin, but there is no talk about stealing the UK shares of ordinary Russian people.

It would be illegal under international law if Russia did this, and how would Russia even do it, as there are so many different nationalities of shareholders. JRS for example may have many shareholders from countries that Russia views as “friendly” countries.

So do these eventually return to £5 ?

Ninjadude

Thanks. So it looks like more than 80% of the value is from shares listed on Moex, and less than 20% is from GDR holdings. If the value was calculated today according to current Moex prices then NAV of JRS shares is probably between £4 and £5.

I would not be surprised to see JRS shares back at this price quite soon, and back at between £8 and £10 within a year or two.

Where do JRS list their exact holdings of Russian shares? There is no list of exact holdings in the annual report. For example, JRS own 100 Gazprom shares listed on Moex, 200 Lukoil GDRs listed in London.

Anyone know where this information can be found?

It could certainly be a 7 bagger, or 10 bagger. The assets are hugely undervalued at various levels. The price is about one quarter of the actual underlying value of the investments on the Moex. And then the Moex is hugely undervalued compared to most other stock markets. Companies like Gazprom and Lukoil are trading at PE ratios that are a fraction of other big energy companies in Europe. And now that the rouble is backed by gold, the rouble is also very undervalued. So if the Moex rises to a fair value level, and the rouble continues to rise, this could easily be a multi bagger within a few years. It would not be surprising to see these trading at £10 or £15 within the next 5 years.

What is the problem with getting an auditor? Can they not just appoint an auditor from Kazakhstan?

I also think Pope’s comments on urging ceasefire and peace will resonate with highly catholic population of Russia.

There are very few Catholics in Russia. The main religion is Orthodox.

“nato force will inevitably go in to push Russian forces back to Russia proper.”

lol. NATO will not ever be going to war with Russia. That would mean WW3 and nuclear destruction of both sides. Russia will take the Donbass in a few days and no one is going to be able to stop them or want to stop them. War over in a few days.

600LT

I saw in one of your earlier posts here that you have about 700,000 shares in POLY so they are worth over £2 million at the present time. You must be very rich to be able to afford such an investment in a single share.

Do you not have any concerns at all that Putin or Russia may at some time in the future expropriate the shares that you hold or pass some legislation to take or steal the shares ?

They are saying that the war and will be over by 9th May as that is the day of the big parade in Moscow.

If these JRS were exchanged today for shares on Moex, these JRS shares would have a value of about 500 roubles each, or about £5 each at the present exchange rate. Foreign investors may have a long wait to sell out, or maybe the wait will not be long, but they are still probably worth somewhere between £3 and £5 at the present time. And when the war ends they could very easily go back to £7 or £8.

The cash and shares held outside Russia (kazatomprom etc) will still have value.

How much value? Maybe 5p or 10p a share.

“are shares in the lifetime earnings of heavyweight Russian companies with a long history of impressive profitability something that is worthless? I know what I believe and am positioned accordingly.”

If Russia or Putin take the shares from you, then yes the shares would be worthless.