Russian equities declined for a second weekly retreat as the nation’s largest lenders sank and crude oil, the nation’s chief export earner, slid.
The Micex Index lost 0.7 percent to 1,508.17 by the close in Moscow, for a 0.8 percent drop in the week. Of the 50 stocks on the gauge, 27 fell and 23 rose. The dollar-denominated RTS Index also decreased 0.7 percent to 1,577.26. Financial shares lost 2.2 percent on average, the most of nine industry groups.
OAO Sberbank, Russia’s largest lender and the biggest stock in the index with a 15 percent weighting, slipped 2.5 percent to 105.10 rubles, the biggest drop since Nov. 13. VTB Group, the nation’s second-largest bank, slumped 0.9 percent to 5.59 kopeks following a 1.5 percent advance yesterday after the Telegraph in London reported Qatar’s sovereign wealth fund is in advanced talks to invest between $3 billion to $3.5 billion into the bank. Crude oil fell 1.8 percent in New York, headed for a second weekly decline after eight weeks of gains.
“Sberbank and VTB rose significantly earlier in the week, now they’re reversing course, dragging the market down,” Alexei Yazikov, head of research at Aton Capital LLC, said by phone from Moscow. “People are fleeing the Russian market.”
Sberbank has rallied 13 percent this year, while VTB has added 4.3 percent.
The Moscow Exchange, which was created out of a merger between competing bourses in 2011 and operates the Micex and RTS indexes, raised $498 million in the biggest initial share sale in Russia since 2007, pricing at the bottom of its target range.
The deal values the bourse at 126.9 billion rubles ($4.2 billion), according to an e-mailed statement today. The shares, which are scheduled to start trading today under the MOEX RX ticker, were priced at 55 rubles each.
The exchange’s shares closed unchanged in Moscow.
Inflows into Russian equity funds increased to $127 million in the week ended Feb. 13, according to an e-mailed note from VTB Capital, which cited EPFR Global data.
Stocks extended declines as Russia’s industrial output unexpectedly contracted in January for the first time in more than three years, while industrial production in the U.S. also shrank last month.
OAO Pharmstandard was the biggest gainer on the index, jumping 5.9 percent to 2,090.80 rubles. Russia’s largest drugmaker surged as much as 6.7 percent as it announced a buyback of up to 8 billion rubles of shares.
The Standard & Poor’s GSCI Index of commodities lost 0.9 percent to 673.01. Ten-day price swings on the Micex dropped to 13.328 and the number of shares traded on the gauge was 7.9 percent below the gauge’s 10-day average, data compiled by Bloomberg show.
The Russian Depositary Index dropped 1 percent, led by depositary receipts of Sberbank.
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 2.3 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has gained 1.1 percent over the same period.
The Market Vectors Russia ETF (RSX:US), the largest dedicated Russian exchange-traded fund, decreased 1.1 percent to $30.32 yesterday. The RTS Volatility Index, which measures expected swings in futures, dropped 1.4 percent to 21.11 points. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. declined 0.9 percent yesterday.
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