Russian shares tumbled as crude oil, the country’s main export earner, dropped and OAO Gazprom slumped.
The Micex Index (INDEXCF) retreated 1.1 percent to 1,410.23 by 11:56 a.m. in Moscow, the biggest slide in almost a week. Trading volumes were 31 percent above the 30-day average, while 10-day price swings rose to 10.577. The dollar-denominated RTS Index (RTSI$) sank 1 percent to 1,439.82.
Crude oil, which together with natural gas accounts for about half Russia’s budget revenue, retreated 0.4 percent to $94.23 in New York. Gazprom, Russia’s biggest company and natural gas export monopoly, lost 2 percent to 126.80 rubles. Preferred shares of OAO Tatneft, a regional oil producer, declined 1.3 percent to 106.53 rubles.
OAO Rostelecom, the country’s biggest fixed-line phone operator, fell as much as 1 percent before trading down 0.2 percent at 115.74 rubles. Konstantin Malofeev’s Marshall Capital Partner annuled the sale of its 11 percent stake in Rostelecom to billionaire Arkady Rotenberg, according to a statement yesterday. Rotenberg’s company agreed to buy the shares from Marshall for an undisclosed amount in February.
“The loss of an influential shareholder such as Rotenberg may cause a negative market reaction,” Alfa Bank analysts Elina Kulieva and Dmitry Doronin said in an e-mailed note today.
At the same time, the cancellation of the deal “may reduce fears that Rostelecom will use non-market methods when expanding into the mobile segment,” Alfa Bank analysts said. That would be “positive for MTS, VimpelCom and MegaFon.”
OAO Mobile TeleSystems, Russia’s biggest mobile operator, added 1 percent to 268.67 rubles. VimpelCom Ltd. rose 0.3 percent to $11.98 in New York yesterday.
The RTS Volatility Index, which measures expected swings in stock futures, climbed 1.2 percent today to 19.39, the fourth day of gains. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, added 0.2 percent to $27.64 yesterday. The Bloomberg Russia-US Equity Index (RUS14BN) increased 0.6 percent to 96.45 in New York yesterday.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times estimated earnings and has lost 4.4 percent this year, compared with 10.4 times for the MSCI Emerging Markets (MXEF) Index, which has slid 2.8 percent this year.
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