* Nasdaq-listed tech company to trade on home bourse
* Move in line with Kremlin wishes
* Could help to shield Yandex if Western sanctions tighten
(Adds CEO quote, analyst comment, more context)
By Anastasia Teterevleva and Maria Kiselyova
MOSCOW, June 3 Shares in Russian internet search
engine Yandex will begin trading in Moscow on Wednesday
in a move that will please the Kremlin and could shield the
Nasdaq-listed company from any tightening of Ukraine-related
sanctions against Russia.
Russian President Vladimir Putin has led a drive to promote
the Moscow Exchange and woo Russian companies that
have chosen to float on foreign stock markets such as London and
New York to widen their shareholder base and boost valuations.
Yandex will remain listed on the tech-heavy Nasdaq in the
United States, but its Moscow debut will open the door to
Russian investors and funds that are only allowed to invest
within Russia, CEO Arkady Volozh said.
No new shares will be offered, but Volozh pointed out that
the company's stock will now be tradeable almost 24 hours a day.
As part of Moscow's stock market initiative, the government
is also pushing for companies with offshore entities to
re-register at home and pay tax in Russia.
The campaign has gathered momentum since the West imposed
sanctions against some Russian individuals and companies over
Moscow's annexation of the Ukrainian region of Crimea.
"It's here that almost all our servers are, it's here that
we pay taxes and now we are also trading here," Volozh told
reporters on Tuesday.
Yandex certainly holds a dominant position in Russia, where
its 60 percent market share far exceeds the 27 percent held by
global market leader Google.
But the company's tumbled 5 percent on April 24 after Putin
said the Internet was a CIA project and suggested that there had
been too much outside influence on Yandex. The company is
registered in the Netherlands and has a large foreign
shareholder base by virtue of its Nasdaq listing.
Less than two weeks later Yandex nominated the CEO of
state-run Sberbank, former economy minister German
Gref, as a new non-executive board member, citing the need to
lobby more effectively in a climate of tighter regulation of
internet companies in Russia.
Russia, with the largest Web audience in Europe, has
tightened monitoring of user-generated content since activists
used social networks to organise protests over the 2011
parliamentary election that handed victory to Putin's United
Authorities can now block sites distributing content such as
child pornography, but critics say the tighter controls could
also be used to increase censorship. Putin also signed a law
forcing bloggers with a large audience to register with the mass
His opponents say the Kremlin wants to silence dissent on
the Internet, a rare platform for opposition in a country where
state television channels dominate the airwaves.
Alexander Vengranovich, an analyst at the Otkritie
brokerage, said the Moscow listing was positive for Yandex
because it could ease political risks and potentially lead to
inclusion in the MSCI Russia index, a benchmark for emerging
market investors worldwide.
"A Russian listing diversifies Yandex's risks in the event
of further sanctions for Russian companies trading in the United
States, which was a concern for investors, and shows loyalty to
Anastasia Obukhova, an analyst at VTB Capital, said the
listing should help to overcome "politicised sentiment" over
Russian internet businesses, providing some relief for U.S.
investors with large exposure to such companies.
Yandex raised $1.4 billion in an oversubscribed initial
public offering in New York three years ago. It reported net
profit of about $400 million last year on revenue of $1.2
Yandex had indicated in February that its board would
support an additional listing in Moscow, while London-listed
Russian rival Mail.Ru announced that it intended to
seek a Moscow listing in the near
Yandex also announced on Tuesday that its board had
authorised the gradual repurchase of convertible bonds due to
mature in 2018. The 1.125 percent bonds are convertible into
company stock or cash, or a combination of both, at maturity.
The company did not specify the extent of the bond
repurchase plans but it also said it could extend its share
buyback programme to 18 million shares from 15 million, after
which it could start paying dividends for the first time.
Yandex has already repurchased $500-600 million of its
shares from the market, CEO Volozh said.
(Editing by Mark Trevelyan and David Goodman)