Polyus shares are falling for the third trading session in a row. On July 4, the shares fell by more than 7%, and by 17:35 Moscow time they are getting cheaper by 6.63%, to 7916 rubles. Since December, Polyus shares have lost almost 50% of their ruble value.
“The shares may look oversold, but they don’t have growth drivers right now. The export of gold from Russia after the introduction of a ban on its purchase in the EU countries is theoretically possible, although, as in the case of oil, this will lead to a decrease in the price. Companies may begin to export more raw materials, concentrate, use other methods, but there are no guarantees that the sanctions will not expand. Therefore, before the appearance of positive news, the shares are likely to continue the negative trend. Under the current conditions, the state could support domestic producers and resume buying gold on the domestic market. Such a measure would support the shares of gold producers , ”comments Georgy Vashchenko, head of the department for trading operations on the Russian stock market at Freedom Finance IC.
Polyus’ leverage decreased to 0.6x EBITDA last year. But it cannot be ruled out that the company will adjust its investment program in the direction of reduction if it is necessary to reduce exports, and will also not declare dividends based on the results of the 1st half of the year.
Bloomberg reported on July 1 that the EU is working on new sanctions against Russian gold that would ban imports of Russian gold into the EU. Russia is the second largest gold miner in the world, with shipments for 2021 estimated at £12.6bn.
The new package will also complement the previously approved sanctions, which may include adjusting the rules for the transit of sanctioned goods to Kaliningrad.
The G7 leaders, who met this week in Germany, also agreed to discuss options for capping the price of Russian oil, including by banning services such as insurance needed to transport oil and petroleum products.