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. Last Updated: 07/27/2016

Gold Dividends Please Market


The Finance Ministry has paid the first quarterly dividend on gold certificates issued late last year, inspiring confidence and increasing turnover in the market for the securities, dealers said.

The certificate's value, which is tied to the price of gold in London, recovered to 163.24 million rubles Wednesday after taking a sharp fall to 158.28 million rubles Tuesday.

Fyodor Lyubanovski, securities specialist at the Russian Credit Bank, one of about 20 banks authorized to trade in gold certificates, estimated that the Finance Ministry has sold more than 60 percent of the 1 trillion ruble ($730 million) issue.

Lyubanovski expressed "great happiness" that the government had paid the dividend, which amounted to 2.5 million rubles per certificate.

"The fact that the Finance Ministry fulfilled its obligation activates the market," he said.

The Russian Stock Exchange has begun trade in the certificates, but Lyubavovski said that nearly all secondary trade will probably remain off the market, making turnover difficult to estimate.

"Those banks that sell certificates and parts of certificates are not emerging onto the exchange, but instead trying to create a market around themselves," he said.

The Finance Ministry in October issued 1 trillion rubles of the one-year gold certificates, each redeemable for 10 kilograms of Russian gold or the equivalent in rubles. The bank has been selling them through a network of authorized banks. The certificates pay about 6.5 percent annual interest on the dollar value of 10 kilograms of gold, converted into rubles.

Banks dealing in the certificates have split them into 100-gram chunks, which they sell to smaller investors without the interest coupon.