Bloomberg News

Russia’s Micex Advances to 4-Month High on Commodities, China

January 14, 2013

Russian (INDEXCF) stocks climbed to their highest in almost four months as oil gained and appetite for equities in the world’s biggest energy exporter increased on bets China’s economy is recovering.

The 50-stock Micex Index added 0.5 percent to 1,518.68 by 10:32 a.m. in Moscow, its strongest intraday level since Sept. 19. OAO Magnitogorsk Iron & Steel increased 1.5 percent, while OAO Bank Vozrozhdenie jumped 1.4 percent. Oil producer OAO Surgutneftegas added 1.3 percent.

Crude, Russia’s main export, rose as much as 70 cents to $94.26 a barrel in New York. China’s economic growth may have recovered to 7.8 percent in the fourth quarter from a year earlier, after sliding to a three-year low of 7.4 percent in the previous period, according to the median estimate in a Bloomberg News survey ahead of data Jan. 18. China’s exports jumped 14.1 percent in December, according to data last week.

“Optimism on the recovery of China’s economy is rising to very high levels on the back of the unexpectedly strong data on foreign trade trends,” UralSib Financial Corp. analysts Slava Smolyaninov and Natalia Berezina wrote in an e-mailed report today.

Copper for delivery in three months on the London Metal Exchange rose as much as 0.8 percent to $8,110 a metric ton. On the London Metal Exchange, aluminum, zinc, lead, and nickel also advanced.

Norilsk, Sberbank

OAO GMK Norilsk Nickel, Russia’s biggest miner, jumped to its highest since November, gaining as much as 1.2 percent to 6,000 rubles.

OAO Sberbank, the country’s largest lender, topped 100 rubles for the first time since March, adding 0.6 percent to 100.16 rubles.

OAO Uralkali, the biggest potash producer by output, gained 1.7 percent to 235.23 rubles. Belarusian Potash Co., the company’s trading arm, agreed “in principal” on the main terms of a contract with China, industry researcher Agrus FMB Potash said in a weekly report Jan . 11. Uralkali is due to report production results today.

The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, decreased 1 percent to $29.76 Jan. 11, the lowest level since Dec. 28. Trading volume was at 33 percent above the average for the past three months, according to data compiled by Bloomberg. The ETF fell 2.7 percent last week. The RTS Volatility Index, which measures expected swings in futures, gained 0.3 percent to 21.29 points Jan. 11.

The Micex trades at about 5.6 times estimated earnings. That compares with a multiple of 10.8 times for the MSCI Emerging Markets Index.

Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg. Russia receives about half of its budget revenue from oil and natural gas industry sales.

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

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net


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