Bloomberg News

Russia’s Micex Drops for 2nd Day as Oil Slides on Greece Concern

February 12, 2012

Feb. 10 (Bloomberg) -- Russian stocks retreated for the second day after oil fell from the highest in three weeks on concern Europe’s debt crisis will worsen and curb global commodity demand.

The 30-stock Micex Index dropped 0.4 percent to 1,535.26 by 11:08 a.m. in Moscow, taking its weekly decline to 1.9 percent. Oil producer OAO Gazprom Neft sank 2.3 percent. OAO Sberbank, Russia’s largest bank, decreased 0.8 percent. OAO Uralkali, the world’s biggest potash producer, lost 1.1 percent. The dollar- denominated RTS Index dropped 0.3 percent to 1,638.09.

Oil, Russia’s main export revenue earner, dropped as much as 46 cents to $99.38 a barrel in New York, snapping the longest winning streak since December. Greece must pass its latest austerity package into law before European leaders endorse 130 billion euros ($173 billion) of aid, Luxembourg Prime Minister Jean-Claude Juncker said yesterday.

“Oil prices underwent a slight correction following the Greek news,” Maria Kalvarskaia, who heads equity research at TKB Capital in Moscow, wrote in an e-mailed report today. “Another delay in finding a way out soured investor mood.”

Shares of VTB Group, Russia’s second-biggest lender, slid for the fifth day, losing 0.9 percent to 6.835 kopeks. The bank said yesterday it will buy back shares from investors who participated in the lender’s 2007 initial public offering at the IPO price of 13.6 kopeks a share.

“The financial impact of the buyback is not that material for VTB,” Andrew Keeley, banking analyst at Troika Dialog, wrote in a report e-mailed today. “The greater significance lies in the corporate governance and legal ramifications. It does however again raise questions about the political influence on the bank and its decision making.”

The Micex is up 10 percent this year and trades at 5.7 times analysts’ earnings estimates for member companies.

The gauge retreated 17 percent in 2011, compared with an 18 percent drop for Brazil’s Bovespa index, which is valued at 10.5 times estimated earnings according to data compiled by Bloomberg. The Shanghai Composite Index trades at 9.7 times estimated earnings, and the BSE India Sensitive Index has a ratio of 15.8.

Russia-focused equity funds attracted $108 million of inflows in the week to Feb. 8, UralSib Financial Corp. said today, citing fund tracker EPFR Global.

--Editors: Chris Peterson, Alan Purkiss

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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