Sberbank Investment Research Releases new Corporate Governance Report
OREANDA-NEWS. Sberbank Investment Research, the research department of Sberbank CIB, announces the release of its new Corporate Governance research report. The report, entitled “Russian Corporate Governance – Embracing the Opportunity,” provides a fresh and comprehensive overview of Russian corporate governance. The report also looks at the Russian government’s progress in turning Moscow into a major financial center and analyzes its new draft corporate governance code.
Poor corporate governance is often cited by fund managers as the principal reason why Russia’s valuation gap versus emerging market and developed market peers exists and why it has widened over the past decade. A key outcome from the analysis is a watch list of stocks that we believe are set to materially improve their corporate governance, which should be rewarded by strong outperformance over the medium term.
In the report Sberbank Investment Research take an in-depth look at corporate governance in Russia by doing the following:
· Categorizing 160 Russian corporate governance events over the past decade for Russia’s largest listed equities into 12 quantifiable corporate governance factors and then analyzing these against each company and sector’s subsequent share price performance across various time periods.
· Normalizing each stock’s share price performance post-corporate governance event versus the market/sector to help eliminate bias and noise. We then quantify the relative importance of each of the corporate governance factors to establish a ranking of factors that matter most for equity holders.
· Using this fresh analysis and the views of our sector analysts to identify a watch list of Russian stocks that may be at an inflection point in terms of adopting more progressive corporate governance policies. We quantify what the potential upside might be.
· Analyzing progress made in the Russian government’s cooperation with the OECD (and others) to update the 2004 voluntary Code on Corporate Governance and assess the merits of a potential plan by Moscow Exchange to launch a Novy Rynok (“New Market”) Index with corporate inclusion largely based on adherence to best practice corporate governance principles.
· Benchmarking Russian corporate law, corruption and corporate governance versus other GEMs including China, Brazil, India and South Africa.
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