Russian stocks dropped for a third day as tumbling oil prices curbed demand for equities in the world’s biggest energy exporter.
The Micex Index (INDEXCF) declined 0.6 percent to 1,298.08 by the close in Moscow, paring its gain this week to 1.3 percent. The benchmark gauge retreated 11 percent last month, the most since September. OAO Sberbank, the country’s biggest bank, slid 3.7 percent as the ruble sank to a three-year low. TNK-BP, Russia’s third-largest oil company, lost 10 percent, falling to a record low after BP Plc said it is seeking to sell its 50 percent stake in the venture, unwinding a nine-year investment.
Crude slumped as much as 4.6 percent after worse-than- expected U.S. and Chinese economic data stoked concern demand will fall. Russian stocks trade at 4.7 times estimated earnings, having lost 7.4 percent this year. That compares with a 2.3 percent drop for the MSCI Emerging-Market Index (MXEF) which trades at 9.2 times projected earnings.
Chinese data “raises concerns about a more broadly based slowdown,” Chris Weafer, Troika Dialog’s chief strategist in Moscow, said in an e-mailed note. Oil “reacted negatively to the data. The continuing risk aversion across all markets will also keep pressure on the ruble and on banking sector shares.”
China’s Purchasing Managers’ Index declined to 50.4 in May from 53.3 in April, the statistics bureau said. The U.S. jobless rate rose to 8.2 percent from 8.1 percent, according to today’s data.
The dollar-denominated RTS Index fell 1.2 percent to 1,227.32, according to data on the Micex-RTS Exchange’s website. Citigroup Inc. cut its RTS estimate for 2012 to 1,600 from 2,000 after lowering its 2013 oil price estimate 18 percent to $99. Russia received almost 50 percent of budget revenue from oil and gas sales last year.
Sberbank dropped to 78.75 rubles as the ruble depreciated 0.6 percent to 33.68 per dollar. A weaker ruble encourages Russians to withdraw and convert ruble deposits, Sberbank’s main source of funding.
Russia-focused equity funds posted $8 million in outflows for the period ended May 30, according to VTB Capital and Troika Dialog, which cited EPFR Global data. Russians funds lost $361 million in May, compared to an outflow of $1.1 billion from China and $659 million from Brazil, Troika’s strategist Chris Weafer said in an e-mailed note.
The MSCI Emerging Markets Index fell 1.2 percent to 895.03 today, the lowest intraday level in more than a week, while the MSCI BRIC Index of shares traded in India, Brazil, Russia and China, dropped 1 percent.
TNK-BP plunged to 70 rubles by the close, the lowest level since the company’s shares were listed on the Micex in December 2010. The stock trades at 3.9 times estimated earnings.
The sale of TNK-BP, which analysts said could raise at least $30 billion, would dismantle BP’s landmark venture, the largest foreign investment in Russia’s oil industry.
OAO Rosneft and Rosneftegaz, the state company that owns it, “never thought about” buying BP Plc’s 50 percent holding in the TNK-BP Russian oil venture, said Chief Executive Officer Igor Sechin, a former deputy to Vladimir Putin.
Rosneft, Russia’s biggest oil producer, will consider the market situation and make a decision on a potential bid later, Sechin added. The company’s shares fell 0.7 percent to 205.96 rubles after declining as much as 2.8 percent earlier.
The stake sale would be “negative” for TNK-BP “if it resulted in TNK-BP lagging behind other Russian oil majors or led to an increase in leverage,” Fitch Ratings Ltd. analysts led by Jeffrey Woodruff said in an e-mailed note.
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