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Russia Stocks Advance 2nd Day as Investors Await Greece Meeting

November 26, 2012

Russian (INDEXCF) stocks rose for a second day as investors awaited the outcome of a meeting between Europe’s finance chiefs.

The Micex Index increased 0.2 percent to 1,415.52 by 10:30 a.m. in Moscow after adding 2.1 percent last week. Federal Grid Co., the country’s monopoly for high-voltage power transmission, surged as much as 3.4 percent. OAO Magnitogorsk Iron & Steel jumped 3.5 percent.

European finance chiefs meet today to negotiate a bailout payment for Greece. Federal Grid climbed after President Vladimir Putin signed a decree last week, giving power distributor OAO MRSK Holding a majority stake in the company. Magnitogorsk posted a third-quarter profit on Nov. 23, following a net loss in the previous three months.

“How far investors are able to advance last week’s rally will depend first on the outcome of today’s meeting between EU finance ministers and the IMF to negotiate terms for the release of the next bailout tranche to Greece,” Chris Weafer, Sberbank CIB’s chief strategist in Moscow, said in an e-mailed note. “Optimism is high that a deal will be struck following comments by senior EU leaders and informal meetings held over the weekend.”

The dollar-denominated RTS Index (RTSI$) gained 0.2 percent to 1,435.14, poised for the highest level since Nov. 2.

Emerging-market stocks rose for a sixth day, the longest stretch in 10 weeks, after Taiwan’s government said it’s considering ways to bolster equities and speculation increased that Japan will boost stimulus efforts.

Crude Oil

Crude, Russia’s main export earner, declined 0.2 percent to $88.08, the first decline in three days. Israel relaxed restrictions on Palestinians in the Gaza Strip after last week’s cease-fire with Hamas survived claims of breaches by both sides. Russia receives about half of its budget revenue from oil and natural gas sales.

Federal Grid climbed 2 percent to 21.59 kopeks, with trading volumes at 37 percent of the three-month daily average. The power transmission company rose 10 percent last week, the biggest gain on the Micex.

The Micex trades at 5.3 times estimated earnings, the lowest valuation among 21 emerging markets tracked by Bloomberg. That compares with a multiple of 10 times for the MSCI Emerging Markets Index. Russia’s benchmark gauge has advanced 0.9 percent this year, compared with an 8.7 percent gain for the global index for developing markets.

To contact the reporter on this story: Ksenia Galouchko in Moscow at

To contact the editor responsible for this story: Gavin Serkin at

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