Russian Utilities/Transport - Closing Short-Term Pair-Trade Idea

We close our short-term pair-trade idea to go long Unipro versus Globaltrans. The idea did not perform the way we had expected. Unipro announced another delay in the relaunch of the Berezovskaya TPP and revised its dividend guidance downward, while Globaltrans approved a share buyback, which supported the stock. As a result, the trade idea did not work and both stocks produced a roughly 16% total return in dollar terms since March 20.INVESTMENT CASEThe trade idea that Unipro should outperform Globaltrans owing to its better resilience did not perform. There ended up being company-specific factors that affected the performance of both stocks. For Unipro, there was another postponement of the relaunch of Berezovskaya TPP and a revision of the dividend guidance for 2020. As for Globaltrans, the news regarding the approval of the buyback for 5% of shareholder capital supported the stock. We expected Unipro's dividend to be more resilient and sustainable, whereas in fact it revised its dividend guidance downwards, while Globaltrans reiterated its dividend guidance, so the idea did not work well, and we therefore close it. PERFORMANCE AND WHAT'S IN THE PRICEBoth stocks produced a dollar-denominated total return of roughly 16% since inception. The total return of the RTS Index was more than 23% during the same period.