Bloomberg News

Russia Stocks Set for Biggest Jump in Month as Surgut Rallies

April 04, 2013

Russian shares headed for the biggest gain in a month as OAO Surgutneftegas jumped on bets the oil producer will report earnings to international standards this month.

The Micex Index (INDEXCF) added 0.9 percent to 1,440.28 by 1:26 p.m. in Moscow, the most since March 11 on a closing basis. Trading volumes were 1.1 times above 30-day average, while 10-day price swings slumped to 10.40, the lowest since March 15. Surgutneftegas increased 3.6 percent, the most on the index. The dollar-denominated RTS Index (RTSI$) increased 0.2 percent to 1,428.92.

JPMorgan Chase & Co. raised Surgut to overweight from neutral yesterday, citing expectations it will boost earnings visibility by reporting to international accounting standards this month. Crude oil was steady at $94.49 a barrel in New York. Russia receives about half of state revenue from oil and gas.

Out of 50 stocks on the Micex, 29 rose and 21 fell. Surgutneftegas (SGGD) also led gains on the Russian Depositary Index, which increased 0.4 percent.

The RTS Volatility Index, which measures expected swings in stock futures, tumbled 1.2 percent today. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 2.1 percent to $26.77 yesterday. The Bloomberg Russia-US Equity Index (RUS14BN) declined 1.8 percent yesterday.

Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.3 times estimated earnings and has lost 3.4 percent this year, compared with 10.3 times for the MSCI Emerging Markets Index, which has slid 3.4 percent this year.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

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


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