Russian equities climbed for the first time in six days as crude rose and OAO Rosneft, the nation’s biggest oil producer, gained on bets gas export restrictions may be loosened.
The Micex Index added 1.7 percent to 1,537.93 by the close in Moscow, the most since Jan. 8. Of 50 stocks, 4 declined and 46 rose. Consumer goods shares led the increase, rising 2.5 percent on average. The dollar-denominated RTS Index rallied 1.9 percent to 1,612.65.
Oil, Russia’s main export, increased 0.3 percent to $97.77 in New York. President Vladimir Putin called for a gradual liberalization of liquefied natural-gas exports during an energy commission meeting today. OAO Gazprom holds a monopoly on gas shipments outside Russia. OAO Novatek, the largest independent natural gas producer, closed up 2.2 percent, while Rosneft added 3.8 percent, the most since Nov. 1.
“Investors are welcoming the prospect of boosting competition in the natural-gas export market,” Ivan Manaenko, the head of research at Veles Capital LLC in Moscow, said by phone. “This would be a positive development both for Novatek and Rosneft.”
The president is balancing calls from Rosneft and Novatek to liberalize gas exports and encourage investment in new fields, while protecting state interests represented by Gazprom, which is the world’s biggest producer of the fuel and owns and maintains the country’s pipelines.
Gazprom increased 2.9 percent to 137.06 rubles, the most since Sept. 14 after sinking to the lowest level since April 2009 yesterday. Gazprom has the second-highest weighting on the Micex at 13.6 percent, while Rosneft has the fourth-largest weighting at 5.7 percent. Novatek has a 3.7 percent weight.
OAO Alrosa jumped 4.1 percent to 31.84 rubles, the highest since March 23. The amount of shares traded was 1.3 million, equivalent to about 1.1 times the three-month average.
Russia is seeking companies to organize the sale of the 7 percent state-owned stake in Alrosa, according to a statement on the Federal Property Management Agency’s website Feb. 5.
“Investors are trying to get into Alrosa on the news that the government is actively preparing for the sale of its stake,” Dinnur Galikhanov, an analyst at Aton Capital LLC in Moscow, said by phone. “Privatization would boost the company’s free float and widen the investor base.”
Ten-day price swings on the Micex advanced to 11.885, the highest since Jan. 30. The number of shares traded on the Micex was 1.3 times above the gauge’s 10-day average, data compiled by Bloomberg show.
MSCI Inc. (MSCI:US) is scheduled to announce its quarterly index rebalancing after the market closes today. The changes come into effect on Feb. 28. EON Russia and OAO Pharmstandard, Russia’s largest drugmaker, may be added to the MSCI Russia Index, stimulating inflows of up to $477 million into each, according to an e-mailed note from Sberbank CIB’s on Feb. 8.
EON Russia rose 0.5 percent to 2.9418 rubles, while Pharmstandard increased 0.2 percent to 1,975 rubles.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg. The Micex trades at about 5.7 times estimated earnings and has added 4.3 percent this year. That compares with a multiple of 8.7 times for the MSCI Emerging Markets Index, which has gained 1 percent over the same period.
The Moscow Exchange, which was created out of a merger between competing bourses in 2011 and operates the Micex and RTS, is seeking to raise at least 15 billion rubles ($499 million) in an initial public offering. Its shares are due to debut in the capital on Feb. 15, according to a Feb. 4 statement.
The Kremlin-backed Russian Direct Investment Fund is seeking to bring China’s $480 billion counterpart into the Moscow Exchange’s initial public offering as an anchor investor, three people with knowledge of the matter said. Chengdong Investment Corp., a unit of CIC International Co., may get as much as 25 percent of the shares being offered in the IPO, said the people, who asked not to be identified because the information isn’t public.
Foreign investors may be deterred from buying the stock because the process of its modernization makes forecasting revenue harder, Prosperity Capital Management said yesterday.
VTB Group, Russia’s second-biggest lender, surged 5.3 percent to 5.56 kopeks, the most since Sept. 14. Bank of America Merrill Lynch reiterated its buy recommendation for the stock in a note today, citing earnings per share growth and “supportive” operating environment.
The Standard & Poor’s GSCI Index of commodities was up 0.2 percent at 679.94. The Russian Depositary Index increased 1.6 percent, led by depositary receipts of VTB, which rallied 5.8 percent.
The Market Vectors Russia ETF (RSX:US), the largest dedicated Russian exchange-traded fund, declined 0.2 percent to $30.25 yesterday. The RTS Volatility Index, which measures expected swings in futures, retreated 0.9 percent to 22.13 points. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. rose less than 0.1 percent yesterday.
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