Russian (INDEXCF) stocks rose for a second day, climbing for a fourth week, as manufacturing grew more than forecast and consumer services shares advanced.
The Micex Index added less than 0.1 percent to 1,547.22 by the close in Moscow, extending this week’s advance to 0.2 percent. Of 50 stocks, 20 dropped and 30 rallied. The dollar- denominated RTS Index (RTSI$) rose 0.4 percent to 1,628.31. The Micex’s 50-day volatility fell to 12.202, the lowest in at least 10 years. OAO Magnit, Russia’s biggest food retailer by market value, surged 2.9 percent to the highest since it was listed on the exchange in 2006.
Consumer stocks and industrial shares added 2.3 percent and 2.2 percent, respectively. The country’s manufacturing rebounded in January from a 15-month low as an increase in domestic business helped propel new orders at the fastest pace since March 2011, HSBC Holdings Plc (HSBA) said. Equities extended gains as data showed U.S. hiring increased in January.
“Russian PMI shows that the growth is continuing, warming appetite for riskier assets,” Slava Smolyaninov, chief strategist at UralSib Capital in Moscow, said by phone.
The Micex Index pared gains as OAO Rosneft, Russia’s biggest oil producer, retreated 1.7 percent to 261.87 rubles, the most since Nov. 22. Fourth-quarter earnings fell 69 percent to 57 billion rubles following a charge related to unproven reserves, the Moscow-based company said today in a regulatory filing.
That missed the 77.2 billion-ruble average adjusted forecast from 10 analysts surveyed by Bloomberg. Rosneft has the fourth-largest weighting on the Micex at 5.7 percent.
OAO Mechel, Russia’s biggest coking coal producer, surged as much as 4 percent, third-biggest gainer on the Micex, after the company’s Mecheltrans unit acquired 21.6 percent of Vanino Sea Trade Port’s common shares for $152 million. OAO Gazprom, Russia’s largest company and natural gas export monopoly, added 0.5 percent.
The Purchasing Managers’ Index advanced to 52.0 in January from 50.0 in December, HSBC said today in an e-mailed statement, citing data compiled by London-based Markit Economics. A reading above 50 indicates an improvement in business conditions, while a result below that suggests deterioration. Economists projected an advance to 50.2, according to the median of five estimates in a Bloomberg survey.
The Moscow Exchange, Russia’s main equity and bonds bourse, will start meeting with investors on Feb. 4 in Moscow to promote its planned initial public offering, Roman Filatov, a portfolio manager at Sberbank Asset Management, who received an invitation, said by phone from Moscow. Meetings will follow in Europe and the U.S., he said.
The number of shares traded on the Micex was 17 percent below the 10-day average, data compiled by Bloomberg show. Standard & Poor’s GSCI Index of commodities gained 0.4 percent to 677.83. The Russian Depositary Index rose 0.3 percent, led by depositary receipts of OAO Uralkali (URKA), the largest potash producer by output, which added 3.9 percent.
Uralkali has received a cautionary notice from Bank of New York BNY Mellon that the company’s program to convert Moscow- listed shares into depositary receipts has nearly reached its limit, according to a Uralkali press representative. Depositary receipts can only account for 25 percent of a company’s shares and 50 percent of its listed shares, according to Russian regulations.
OAO Veropharm declined 1.3 percent to 778 rubles, the lowest level since Nov. 1. OAO Pharmacy Chain 36.6 has halted talks with AFK Sistema on the sale of the Russian drugmaker over price negotiations, Kommersant reported today, citing officials close to both companies without identifying them.
“The news is negative for Veropharm (VRPH) as the deal with Sistema was supposed to heat up interest in the stock,” Ksenia Arutyunova, an analyst at Rye, Man & Gor Securities in Moscow, said in an e-mailed note.
Inflows into Russian equities funds climbed to $255 million in the week ended Jan. 30, according to an e-mailed note from VTB Capital, which cited EPFR Global data.
The Market Vectors Russia ETF (RSX:US), the largest dedicated Russian exchange-traded fund, rose 0.8 percent to $30.82 yesterday. The RTS Volatility Index, which measures expected swings in the stock futures, dropped 6.7 percent to 19.42.
The Micex trades at about 5.7 times estimated earnings and has added 4.9 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which has gained 1.6 percent over the same period.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
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