Bloomberg News

Russia Stocks Slide 1st Day in Four as Gazprom Drops, Fed Meets

June 20, 2012

Russian stocks fell for the first time in four days as the Federal Reserve weighed the possibility of new stimulus measures and as OAO Gazprom, the world’s biggest natural-gas producer, retreated.

The Micex Index (INDEXCF) slid 1.1 percent to 1,374.69 by the close in Moscow. Power companies OAO RusHydro, Federal Grid Co. and MRSK Holding declined at least 2.8 percent. OAO Rosneft, the country’s biggest oil producer, added 0.4 percent as Chief Executive Officer Igor Sechin said Russia’s biggest oil producer may boost dividends.

Gazprom, which has the second-biggest weighting in the gauge at 15 percent, sank as much as 1.1 percent after saying gas exports to Europe fell between January and May from a year earlier. Fed policy makers began a two-day meeting yesterday to discuss U.S. growth and consider lengthening the maturity of Treasury holdings. Crude oil, Russia’s main export earner, retreated in New York trading.

“Investors are not expected to do much more than mark time while waiting for the U.S. Federal Reserve’s policy statement later today,” Troika Dialog’s strategist Chris Weafer said in an e-mailed note.

Rosneft gained as much as 0.8 percent after falling 0.9 percent earlier as Sechin said the oil producer may distribute additional dividends to lift payments to 25 percent of 2011 profit.

Gazprom Revenue

Gazprom, the world’s biggest natural-gas producer, expects revenue from European exports to rise this year as prices increase and customers pay for contracted volumes they didn’t take, Deputy Chief Executive Officer Alexander Medvedev told reporters today in Moscow.

The Russian Depositary Index (RDXUSD) of London-traded stocks dropped 0.9 percent to 1,515.13. Standard & Poor’s GSCI Index fell 0.2 percent.

The MSCI Emerging Markets Index rose 0.3 percent to 945.88, gaining for a third day. Russian stocks trade at 5.1 times estimated earnings, having lost 1.9 percent this year. That compares with a 3.4 percent gain for the MSCI Emerging-Market Index (MXEF) which trades at 9.6 times projected earnings.

The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, dropped 1.6 percent to $25.79. The RTS Volatility Index, which measures expected swings in the index futures, gained 3.7 percent to 38.07 points in New York.

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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