Russian (INDEXCF) equities surged to a nine- month high as the country’s biggest bank rallied and signs of growth in China and the U.S. boosted investor appetite for riskier assets.
The Micex Index added 1.1 percent to 1,540.55 by the close in Moscow, the highest level since April 3, rising 2 percent in the week. Of the 50 stocks in the gauge, 40 advanced and 10 retreated. Industrial and consumer services stocks led the gains, adding at least 2.3 percent. OAO Sberbank, Russia’s largest lender, rose 2.2 percent. The stock has the second- biggest weighting on the index at 14.6 percent. OAO Dixy Group, a Russian supermarket chain, rallied 2.3 percent.
Emerging-market stocks increased as China’s gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, compared with 7.4 percent in the previous period. U.S. housing starts climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey.
“Positive data from the U.S. and China are helping the Russian market,” Liza Ermolenko, an emerging-markets economist at Capital Economics Ltd., said by phone from London. “We’re seeing a general improvement in the market sentiment.”
The amount of shares traded on the Micex was 29 percent above the 30-day average, data compiled by Bloomberg show. The RTS Index (RTSI$), Russia’s dollar-denominated equity gauge, increased 1.1 percent to 1,603.50. The Bloomberg Russia-US stocks measure gained 1.1 percent to 102.87 yesterday.
The Market Vectors Russia ETF (RSX:US), the largest dedicated Russian exchange-traded fund, rose 0.8 percent to $30.12 yesterday, gaining for the first time in three days. The RTS Volatility Index, which measures expected swings in the stock futures, declined 3 percent to 20.87 yesterday.
Crude oil headed for the longest weekly winning streak in 14 months, trading at $95.56 in New York. Russia receives about half of its budget revenues from oil and natural gas industry sales. The benchmark index’s 10-day volatility was at 17.232, according to data compiled by Bloomberg.
All metals rose on the London Metal Exchange, including nickel, copper and tin. Standard & Poor’s GSCI Index dropped less than 0.1 percent to 658.03.
OAO Gazprom, Russia’s natural-gas export monopoly and largest company, rose 0.7 percent to 148.47 rubles. Gazprom said yesterday that capital spending exceeded last year’s $40 billion target after the Moscow-based company reduced cash flow by investing in undersea pipelines projects in Europe.
The producer approved a plan on Dec. 20 to cut expenditures by almost half in 2013. Revenue will probably increase 3.6 percent this year, after falling an estimated 1.1 percent to $156.4 billion 2012, according to the mean estimate of 13 analysts surveyed by Bloomberg.
American depositary receipts of Gazprom added 1.6 percent yesterday and the stock’s 10-day volatility dropped to the lowest since Dec. 28 yesterday. The shares’ gain reduced Gazprom’s discount versus the MSCI Emerging Markets Energy Index (MXEF0EN) to 58 percent, the least since Sept. 27.
OAO Magnit, Russia’s biggest food retailer by market value, rallied 2.8 percent to 5,626.50 rubles, the highest level since July 2006, when the shares were listed. The stock surged 13 percent in the week, the second-biggest gainer on the Micex for the period. Moscow United Electric Grid Co. added 0.2 percent to 1.7126 rubles, climbing 16 percent in the week, the most on the Micex.
The strong economic data “underline the increasing probability that the positive attitude towards emerging markets” will last “longer than just a few months,” Slava Smolyaninov, head of research at UralSib Capital in Moscow, said in an e-mailed note. “The Russian market will also continue to benefit indirectly from these positive developments.”
The Russian Depositary Index (RDXUSD) added 1 percent to 1,805.25. Magnit was the biggest gainer, rising 2.8 percent in London.
The Micex gauge trades at about 5.7 times estimated earnings and has added 4.5 percent this year. That compares with a multiple of 10.8 times for the MSCI Emerging Markets Index, which has gained 2.4 percent this year.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
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