Micex Drops 2nd Day as Output Data Curb Risk Bets; Lukoil Falls
February 23, 2012, 3:28 AM ESTBy Denis Maternovsky
Feb. 22 (Bloomberg) -- Russian stocks fell for a second day as reports showed manufacturing slowed in Europe and China, reducing demand for riskier emerging-market assets.
The 30-stock Micex declined 1.3 percent to 1,538.17 in Moscow, after slipping by the same yesterday. OAO Lukoil, Russia’s second-biggest oil producer, tumbled 3.2 percent as investors bet a $155 billion investment plan will crimp dividends. OAO GMK Norilsk Nickel, the country’s biggest miner, lost 2 percent. The dollar-denominated RTS Index decreased 0.8 percent to 1,642.01.
Emerging-market stocks retreated after reports showed European output unexpectedly shrank in February and forecast Chinese manufacturing may slow for a fourth month. Lukoil, which has the third-biggest weighting in the Micex at 14.3 percent, slid after Interfax reported yesterday that the company plans to invest $155 billion through 2021, a move that may make dividend increases unlikely, according to Troika Dialog.
Weak European data is the “topping on the cake,” with Lukoil “weighing on the overall performance,” Michael Kart, managing partner at Spectrum Partners Ltd. in Moscow, said by e- mail.
After dropping 6.5 percent in December, the Micex is up 10 percent this year and trades at six times analysts’ earnings estimates for member companies. Urals crude’s 16 percent rally in the same period has boosted the allure of stocks in the world’s largest energy exporter.
Dividend Promise
Brazil’s Bovespa index, which is valued at 10.6 times estimated earnings, has climbed 16 percent, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 9.9 times estimated earnings, and the BSE India Sensitive Index has a ratio of 16.
Lukoil slid to 1,778.90 rubles, a second day of declines and its weakest level since the start of the month. OAO Rosneft, its larger, state-run rival, dropped 1.3 percent to 216.99 rubles. Urals, Russia’s main export oil blend, rose 0.8 percent to $122.08 a barrel.
“With such capex, we would have difficulty understanding how the company’s promise to raise the dividend payout can be carried out,” Troika Dialog analysts wrote in a research note today. “In the reality of Russian petropolitics such a strategy leads to nothing more than a stock de-rating, in our view.”
Lukoil spokesman Gleb Ovsyannikov could not be reached for comment on his mobile phone today.
--Editors: Alex Nicholson, Linda Shen
To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
