Bloomberg News

Russia Stocks Rise to Week High as Oil Rallies, Utilities Jump

June 06, 2012

Russian stocks rose to one-week high as oil, the country’s chief export earner, climbed a third day and power stocks led gains.

The Micex Index (INDEXCF) gained 1.3 percent to 1,313.21 by the close in Moscow, the highest level since May 29 after earlier sliding as much as 0.6 percent. The benchmark gauge tumbled 11 percent last month, the most since September. OAO Gazprom Neft, the oil arm of Russia’s biggest company by value, added 2 percent. Power utilities OAO MRSK Holding and Federal Grid Co. added more than 8.4 percent and OAO Mobile TeleSystems rose 4.1 percent.

Oil rose as much as 2.4 percent in New York as crude inventory shrank. European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s growth outlook worsens. The European Central Bank held its main refinancing rate at 1 percent.

The “oil price rebound is supporting both stocks and the ruble, giving an additional boost to banks,” Alex Kantarovich, head of research at JPMorgan Chase & Co., said by e-mail.

OAO Sberbank, the country’s largest lender, advanced for a second day, adding 3.2 percent to 80.64 rubles. VTB Bank rose 1.9 percent to 5.3 kopeks, the highest level since May 30. Russia’s second-biggest lender climbed for a third day after Chief Executive Officer Andrei Kostin said the central bank will step up efforts to halt a slide in the ruble and as the currency advanced.

Russia received almost 50 percent of budget revenue from oil and gas sales last year. The Micex will be open for trading June 9 and closed June 11-12 for public holidays.

BRICS Futures

The Micex-RTS began trading futures on benchmark equity indexes for Brazil, India, China and South Africa today, after the four other members of the BRICS Exchanges Alliance started trading the contracts in March.

The total volume of shares traded on the benchmark exchange today was 42.1 billion, according to the exchange’s website. Yesterday’s total volume was 32.2 billion shares, according to Bloomberg data.

Trading volumes on the Micex declined last week, with 221.4 billion shares changing hands, down from 306.8 billion a week earlier, according to Bloomberg data.

Stocks retreated earlier as Spanish industrial production unexpectedly fell the most in more than two years in April as the fourth-largest economy in Europe’s single currency union sank deeper into recession.

‘Dangerous’

“The situations in Greece and Spain remain the main concerns, with the latter rapidly turning into the more dangerous,” Peter Szopo, the head of research at Alfa Bank in Moscow, said in an e-mailed note.

Russia-dedicated equity funds posted redemptions for the seventh week in eight, registering a net outflow of $8.2 million in the week ended May 30, according to EPFR Global. Developing- nation equity funds registered outflows of more than $1 billion for the fourth consecutive week, the longest streak since the third quarter of 2011.

The MSCI Emerging Markets Index rose 1.8 percent to 902.02 today, the most since Jan. 26. The MSCI BRIC Index of shares traded in India, Brazil, Russia and China, fell 1.6 percent.

Russian stocks trade at 4.8 times estimated earnings, having lost 6.4 percent this year. That compares with a 1.6 percent drop for the MSCI Emerging-Market Index (MXEF), which trades at 9.3 times projected earnings.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net;

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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