Russia Stocks Sink on U.S. Consumer Data; Vozrozhdenie Tumbles

Russian (INDEXCF) stocks fell as industrial shares declined after a drop in U.S. consumer sentiment spurred concern global growth may slow.

The Micex Index retreated 0.3 percent to 1,495.11 by the close in Moscow for a 0.3 percent gain in the week. The dollar- denominated RTS Index (RTSI$) added 0.1 percent to 1,537.66. Bank Vozrozhdenie tumbled as much as 28 percent. The stock will be removed from the Micex and RTS indexes on March 18 and replaced by shares of the Moscow Exchange, which rose less than 0.1 percent.

The Thomson Reuters/University of Michigan preliminary sentiment index for March fell to 71.8 from 77.6 in February. The gauge was projected to increase to 78, according to the median estimate of 67 economists surveyed by Bloomberg. Industrial stocks lost 3.3 percent on average, the most among nine industry groups in the Micex Index.

“The Russian market has entered a correction phase,” Dmitry Malykhin, who oversees $30 million in Russian assets as chief investment adviser at Moscow-based hedge fund Da Vinci CIS Opportunities, said today. “The U.S. data contributed to the poor sentiment.”

Bank Rossii held the refinancing rate at 8.25 percent, the Moscow-based regulator said in a statement on its website today. All 28 economists surveyed by Bloomberg forecast the decision. The overnight and one-week repurchase rates used to provide banks with cash will be kept at 5.5 percent, while the overnight deposit rate stays at 4.5 percent.

VTB Placement

VTB Group erased gains and closed down less than 0.1 percent at 5.53 kopeks. Russia’s second-biggest lender may sell shares before “autumn” 2013, First Deputy Prime Minister Igor Shuvalov said today in St. Petersburg. VTB plans to place “tens of billions” of rubles of shares through the Moscow Exchange this year, Interfax reported today, citing Chief Executive Officer Andrei Kostin.

Oil in New York added 0.5 percent to $93.52 a barrel. Crude and natural gas account for about 50 percent of Russia’s budget revenue. OAO Novatek climbed as much as 2.1 percent, extending yesterday’s advance and closing up 1.3 percent at 315.54 rubles. OAO Gazprom, Russia’s biggest natural gas exporter, rose 1.4 percent to 144.07. Russia’s government will complete work on proposals to liberalize LNG exports within a month, Energy Minister Alexander Novak said today.

T+2 Transition

The number of shares traded on the Micex was 25 percent above its 10-day average and 10-day price swings on the Micex fell to 10.124, data compiled by Bloomberg show.

The Moscow Exchange will start moving to a two-day transaction settlement system, the so-called T+2, on March 25 for Russian government OFZ bonds and 15 equities, including OAO Rosneft, OAO Transneft and OAO RusHydro, according to today’s bourse presentation.

OFZs and 15 stocks will use T+0 and T+2 settlement systems at the same time until July 1, when the transition to T+2 will be completed. The entire exchange will move to T+2 settlement by the end of 2013. The bourse had earlier discussed launching T+2 for 20 stocks, according to its website.

The shares of the Moscow Exchange, which sold stock in an initial public offering last month, will be added to the Micex and RTS indices with a 0.6 weighting starting March 18, replacing Bank Vozrozhdenie, according to the exchange’s statement. The Moscow Exchange added less than 0.1 percent to 55 rubles, the sixth day of gains.

Outflows

Russia funds reported $41 million in outflows in the week ended March 13, the fourth week of reductions, according to an e-mailed note from Sberbank CIB, which cited EPFR Global data.

The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, rose 0.7 percent to $28.85. The RTS Volatility Index, which measures expected swings in the index futures, fell 1 percent to 18.77.

Standard & Poor’s GSCI Index of raw materials increased 0.5 percent to 653.75. The Bloomberg Russia-US Equity Index (RUS14BN) of the 14 most-traded Russian stocks in the U.S. added 0.4 percent yesterday.

The Russian Depositary Index (RDXUSD) rose 0.7 percent to 1,740.32, led by depositary receipts of Gazprom.

The Micex trades at about 5.5 times estimated earnings and has added 1.4 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which dropped 0.4 percent over the same period.

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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