Russian (INDEXCF) equities rose for a second day as oil, Russia’s chief export, climbed and OAO Gazprom, the nation’s biggest company by market capitalization, advanced after Renaissance Capital raised its price estimate.
The Micex Index added 0.5 percent to 1,503.66 by the close in Moscow. Of 50 shares, 33 increased and 17 fell. Industrial and health-care stocks led the gains, rising at least 1.4 percent. The dollar-denominated RTS Index (RTSI$) jumped 0.9 percent to 1,565.07.
Oil surged as much as 1.4 percent to $94.46 per barrel in New York and pared its advance to $93.10 per barrel before international talks with Iran on its nuclear program. Crude and natural gas account for about 50 percent of Russia’s state revenue. Gazprom, which has the second-biggest weighting on the Micex at 14 percent, jumped 1 percent to its highest level in more than two weeks as Renaissance increased the estimate to $14 and reiterated its buy recommendation.
Renaissance expects Gazprom “to become leaner and start focusing on efficiency as a result of sector reforms,” analysts said in an e-mailed note today.
Gazprom may see $45 million in fund inflows as its weighting in MSCI Inc.’s Russia (MXRU) 10/40 Index was lifted to 9 percent from 8.7 percent, according to an e-mailed note from Sberbank CIB. The stock has fallen 4 percent this year.
OAO Mobile TeleSystems added 0.6 percent to 263.70 rubles. MTS and AFK Sistema depositary receipts retained their fourth spot on the MSCI Russia 10/40 Index, according to an e-mailed note from VTB Capital, which forecast OAO Surgutneftegas preferred and ordinary shares may outperform MTS and Sistema. Surgutneftegas rose 0.8 percent to 29.316 rubles, while the company’s preferred shares were the biggest gainers on the Micex index, up 2.9 percent.
MTS, Russia’s biggest mobile provider by market value, climbed 2 percent Feb. 22 in New York, extending its advance in February to 4.6 percent, the steepest gain on the Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S.
MTS will calculate dividends based on cash flow, rather than net income, as it’s “more transparent” amid ruble volatility, Chief Executive Officer Andrei Dubovskov said in November.
Ten-day price swings on the Micex increased to 15.884, the highest since Jan. 18, while the number of shares traded on the gauge was 54 percent below the measure’s 10-day average, data compiled by Bloomberg show. The ruble strengthened 0.4 percent against the dollar to 30.3065.
The Micex trades at about 5.7 times estimated earnings and has added 2 percent this year. That compares with a multiple of 10.5 times for the MSCI Emerging Markets Index, which has added 0.1 percent over the same period.
OAO Mostotrest (MSTT), the Russian construction company, rallied as much as 2.2 percent after dropping 10 percent last week, the most on the Micex. The shares closed up 1.9 percent at 159.96 rubles, the second-biggest advancer. Alfa Bank reiterated its overweight recommendation, while cutting its price estimate to 235 rubles. The company is a “compelling” investment and provides “unique exposure” to Russian transport infrastructure construction, Alfa analysts wrote in an e-mailed note.
Standard & Poor’s GSCI Index increased 0.6 percent to 662.16. The Russian Depositary Index (RDXUSD) added 1.2 percent, led by VTB Group’s depositary receipts rising 2.8 percent and Gazprom’s depositary receipts gaining 2.2 percent.
The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, gained 0.6 percent to $29.38 on Feb. 22. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. climbed 0.9 percent on Feb. 22.
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